Let's talk about business

Norm_Cabana · #1 05-25-2006, 10:08 PM

Since this is now supposed to be where we discuss business issues I thought I'd throw out a question or two to get things rolling.

Quite often I see people try to break into a business field and the first thought that seems to come into their mind is that the only way that they can do business and get customers is by charging less than the people that are already there. Oddly enough, I didn't do that when I started. I guess my first question is did you try to undercut the existing people in your field and if so, how did it work for you?

GreggVicik · #2 05-30-2006, 11:38 AM

OK, I guess I will tell you my story. A few years ago I purchased the high end Eye-One system for monitors, RGB and CMYK printers and scanners. My plan was to use it to keep my own equipment calibrated and to offer custom printer profiles. After doing some research I saw that many of the custom printer profile services charged between $75 and $100 per profile. My thoughts were that I am sure what they were producing was worth the money but that many people did not have that type of budget since most people use more than one paper type. I felt that if I offered my custom printer profiles for less money, more people could afford them. I had done quite a few custom profiles for free in order to see if my profiles were better than the canned profiles. Everyone was very happy with my profiles so I thought it was the right time to add them to my line of services. At the exact same time, one of the big name profile services was having troubles. I would read post after post from photographers that had sent in their money and had been waiting weeks and months and still no profile. Here I am, able to turn them around in 24 to 48 hours and no takers. I tried adjusting the price. At one point I had them at $39 or 4 for $100 but no takers. I even lowered them to $20 each, still no takers, all the while the post were mounting up about the other company that was not filling the orders, yet taking the money. At that point I raised my price to $75 and have not really tried again. Granted I do not have the technical training that many of the other services have, but I do deliver. I also have a "happy" clause. If you are not happy with the results, you get your money back. I have even contacted forum members that did not have good luck with other profiling services with the offer to created a custom profile for them to try first and only if they liked the results would they pay. I had, if memory serves me correctly, one member take me up on the offer. So for me offering a service for less than others were charging did me no good at all.

David_Buzzard · #3 05-30-2006, 04:03 PM

Some things it works, some things it doesn't. I just got 2500 business cards printed, on both sides, for $175.00. Way cheaper than the last guy I used, and I'm not too particular about them, so it was a no brainer.

However, for wedding photography, which is my thing, cost is fairly low down on people's priority list (as long as you aren't over the top expensive). I hadn't changed my rates in 3 years, and found that I had gone from being the most expensive guy in town to the cheapest in town. So this year I put them up 30%. So far, the amount of jobs has been up over last year, and net income has nearly doubled.

You really have to know your market. The iPod is the most expensive MP3 player on the market, but it's still the dominant model because that's the one everyone wants.

David Buzzard

Norm_Cabana · #4 05-30-2006, 11:08 PM

So Gregg I guess the question for me is have your sales gone above the level where you started?

GreggVicik · #5 05-30-2006, 11:28 PM

No. I have sold very few profiles in total. The few profiles that I have sold have been at the $75 price tag. When I lowered the price, no orders came in at all, so for me lowering my price did not help out. I am better off keeping them in the price range of everyone else. If they sell, they sell. It is not my main business so if sales are low, it is no loss. On a related note, for 2006, business in general is down. I am getting fewer inquiries and most of the calls I am getting seem to go no where. We are now taking a step back and trying to get a feeling for what is going on and where it leaves us.

David Simm · #6 07-01-2006, 10:49 PM

Pricing and market penetration go hand in hand, the exception, as other posts have demonstrated, is when a brand is so much sought after that is can get away with asking whatever. A few classic examples are the Louis Vuiton handbag, doesn't hold any more Than a Coach bag and it is made of leather so why can the get away with prices like twelve hundred bucks? brilliant branding..

Rolex will tell the time very accurately but so will Timex, but there is no pride of ownership in Timex and it is all about how you, your brand and your product are perceived.

When I started shooting wedding over forty years ago, I hadn't a clue about the industry, but what I did, I believe set me on the right track, I borrowed wedding albums from just about everyone I knew and studied them to see who I thought was the best and that was the one I first set out to emulate and then to beat. I became the top priced photographer in town by the seventies, but left UK during the year long strikes by the coal miners and glass workers.

Here in USA there are other market forces that will influence your pricing structure in any given market, for instance if you are a high end wedding photographer and you're not in with the top co-ordinators, you're on a loser, because the top contracts are all in a vice like grip of the party planners.

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