This is a guest post by Andrew “Fundy” Funderburg, the creator of the Fundy Album Builder and Fundy Album Proofer. Please check out the free trials available at http://www.fundysos.com. If you were looking to design albums yourselves, I highly recommend Fundy's products.

I've seen many forum posts on pricing prints for photographers and they usually all end badly. There are those that defend the high price points due to labor, business costs and what the market will bear. And those defending the low end price points, focus on auto-fulfillment, and what the market is willing to pay.

So who's right? Well the answer is simple, both price points are correct?

How can this be? Well, ‘correct' pricing is based only on two things.

1. What the market is willing to pay for something.
2. That a price is profitable according to retail pricing rules.

Let's take a closer look. It's pretty easy to find out if people are willing to pay a certain price for something. You simply throw it out there in the marketplace and if people pay money for it, then it is a viable price. You can move the price point up and down. When it goes down, more people buy it, when it goes up fewer people buy it. Pretty soon, you find the happy price point, quite a few buyers at a profitable price point.

What is profitable? Well, according to the Professional Photographers Association of America, you'll want to have at least a 35% cost of goods mark up to be profitable – that is, pay your bills, run a profit and grow your business. A 35% cost of goods, simply means that for every $1.00 you make, it costs you 0.35¢. If you sell ice cream on the street corner, and you buy it for 0.35¢ and sell it for $1.00, then you have a 35% cost of goods.

To get retail pricing of goods, simply take your costs and divide by the percentage (35%=0.35). So, if something costs you $10 to create for your client:

$10 ÷ 0.35 = $28.50

We'll use this simple formula to prove both arguments are correct. We did this recently in a speaking engagement we had at ProDPI headquarters. We were using our new pricing program, Prosper™ during the demonstration.

Here in our settings, we have our cost of goods set at 25%, a good COG for an established photographer. We've also estimated our hourly rate in our studio for the work we do.

Now, let's look at two scenarios. The first being a photographer who is selling art prints for a portrait sitting or of the bride and groom in a posed shot. This is a special order, the photographer is going to retouch the print, have it shipped to the studio and the bride or groom (probably the bride) are going to come in and pick it up.

As you can see we've calculated that we spend 15 min. finding, opening and retouching the image. We've set aside 10 minutes contact time with the client on the phone and 10 minutes time meeting the client in the studio to chat and $5 for shipping to our studio. Prosper™ has done the math for us, and calculated all of our costs and divided by 0.25. The total is $57. I'm going to just round that off to $60. So, you can see that with this business scenario, $60 for a 4×6 is the proper amount. And if the photographer educates the client about the quality of the print, it should sell.

As you can see, quite a bit has changed here. In this scenario, we've used numbers for an auto-fulfillment. This photographer shoots the wedding, does minimal batch retouching with an action and uploads the whole wedding for anyone to buy. After that, they are done. We've added the price of the print to the calculation and allotted 5 minutes for a quick call or email if the client asks about the delivery of the print. As you can see, Prosper™ has done the math for us and come out to $7 for a retail price on this print. I've rounded down to $6 for the purpose of this discussion.

So, as you can see, depending on how your run your business, $6 or $60 can be the right price for a 4×6 print. It all depends on how much work you are putting into the final product. The only mistake you can make is creating a fine art print and pricing it like an automated fulfillment print.

The simple matter of fact is, if you know your cost of goods then calculating your pricing is easy Junior High School math.

Prosper™ is a product of Fundy Software. You can find out more here about a free trial and the limited time pricing special happening right now.

This is a guest blog is by Robyn Mayne, based in Sydney, Australia. She is a children’s portrait photographer, workshop facilitator and customer experience fanatic! Robyn owns Today is Different and provides photography courses, workshops, retreats and networking events for photographers. Follow Robyn on Twitter.

Who are your customers?

One of the basic elements of any good marketing strategy is a narrowly defined target market – a niche. In fact, a great approach is to start by defining your ideal or perfect customer – Your “right” customer!

Many photographers try to be all things to all people and find it hard to really focus their activity on appealing to their right customers.

Often this happens because someone is on the phone asking for help in an area that’s not really your thing. What tends to kick in here is a fear of saying no to the “wrong” customers. “What if I don’t get any calls from my right customers?”  

While it may seem like growth to take on a new customer, if that customer isn’t a good fit, it can actually take your focus away from real growth and may even create dissatisfied customers that expected something other than what you were able to provide. Dissatisfied customers WILL tell their friends. Do you have a well-defined target market? Or, is it something like…”anyone that we think will pay us”.

So how do you identify your ideal target client?

a) Take a good hard look at your past clients. Look for types of clients that you would love to do more with?
b) Which are your most profitable clients? Are there types of work or types of clients that traditionally produce profitable or unprofitable sales?
c) Do they “want” what you do? If they do not want it for one reason or another, then you are sunk. If you have to convince them of a need, then they are not a good target market.
d) Do they value what you do? Price shoppers will always be prices shoppers. Look for those who appreciate the extra they get from you.

Create a picture of your ideal client

One useful trick is to discover what that ideal client looks like in the most specific way possible and then go about building your entire marketing strategy around attracting more of them. The idea here is that you create a picture of your ideal customer. Give her, or him, a name and a set of characteristics. Consider things like: age; sex; occupation; geography; family; income; beliefs; values; interests; challenges etc.

Now whenever you are reviewing your business, think of a new idea or try a different approach you can ask yourself “Would this appeal to Fiona/Fred?”

What do you think? Have you defined your target market? Do you operate within a niche? Tell us. Discuss. Share. This is the place to do it.

This is a guest blog by Jessica Lewis, co-owner of KRAFT and JUTE, which provides personalized kraft-sleeves and wedding favors using 100% recycled paper. Co-owners Melisa and Jessica are hard working wives and mothers; Melisa is due with baby #2 in December! She is a professor of business and marketing at Edinboro University and is currently working on her doctorate. When not running around after toddlers, Jessica sews sample CD sleeves for clients and runs her own photography business – Live: Beautiful Photography. Melisa and Jessica happen to be cousins who grew up together in northwest PA and have fond memories of playing in the tractor-tire sandbox on their grandparent’s farm.

The process of starting a new photography business is overwhelming for many new photographers. Many get weighed down with setting up a website or blog, finding a proofing site, creating a good workflow, managing a business, designing a logo, developing their brand… oh yeah – and taking and editing pictures. It is a lot of work and with so many different options, it is easy to lose track of time and become frustrated with trying to find the best solutions.

This process of being overwhelmed and frustrated is what led us (Melisa and Jessica) to develop Kraft and Jute. Jessica, photographer of Live: Beautiful Photography, wasn’t happy with the choices of Digital Negatives/DVD Slideshow packaging. We tried using the standard slim jewel case, but it screamed “cheap.” We thought about buying a 5×5 trifold from White House Custom Color, but were overwhelmed with trying to put together artwork and figuring out a nice layout. We knew we couldn’t spend a fortune on really nice custom packaging, but at the same time, we understood the value of a great presentation to the client.

So what better way to solve your own problems – create something for yourself! And that’s just what we did.

We created our own custom, eco-friendly, packaging for digital negatives in which we drew a lot of inspiration from two different websites: Caroline Ghetes and The Paperieboutique

The whole process was organic. We had tons of different ideas swimming around in our heads, but decided (encouraged by economics) to use the resources that were around us – kraft paper, our printer and a sewing machine. The feedback and ideas from friends and family were also key in developing our own professional packaging solutions. We knew that whatever the end result, we wanted something that was simple, yet beautiful.

You can see where we are now in the process by visiting our website, KRAFTandJUTE.com. Yes, this is still a process! We first posted some listings of the packaging products we had created in our Etsy shop. The response from fellow photographers was overwhelming. We were very excited to see their logos and brands printed on our simple CD/DVD sleeves. They looked amazing! We strive to fulfill custom packaging requests from professionals like you that need something that will make their brand stick out (but not lose a fortune in packaging costs).

We continue to build on our standard packaging solutions but also work on a one-to-one level with photographers all over the world to make something that is unique, simple and beautiful for them.

Kraft and Jute products have expanded from the simple CD sleeve to now include: CD/DVD sleeves, double sleeves, custom printing, print sleeves, print folders, and deluxe gift bag packages (for the total presentation). There are so many more new product ideas in the works – just not enough time to do it all at once!

We have produced over 5,000 CD sleeves for photographers and brides since July 2010 and were just featured in the latest addition of Design Aglow's Issue 11, “Presentation Perfection: Packaging That Inspires.”

Our clients LOVE the eco-friendly kraft and jute packaging. We hope you will be inspired to discover or create something beautiful for your treasured clients too!

SPECIAL OFFER: Receive 10 free Simple Stitched CD sleeves with every order of $15 or more until November 30. Mention the following code: “PicSeshu”.

This guest blog is by Andy Bondurant, co-founder and director of Senior Portrait Artists (spa) an organization dedicated to equipping and inspiring senior portrait photographers. spa holds an annual Event that will be held this year in Palm Springs, California, in February 2011. Feel free to follow Andy on Twitter (@spartists), Facebook or the spa blog. Find out more about how spa and spa Event can help your senior portrait business by visiting www.spartists.com.

One of the problems that confront photographers who create high school senior portraiture on a regular basis is the question “What's too sexy?” It seems like every time I get together with a group of photographers, this discussion comes up. Everyone deals with it. I've posted on this question several times over the past year, and it has been one of the most viewed blog posts on the spa Blog to date.

In short, there is no real easy answer. You may please the senior, but not the parent or the parent but not the senior. Or you may be able to please both the senior and mother, but totally miss on the father. It's a fine line to walk no matter how you approach it.

Quite a few years ago we learned a great tip from fellow senior portrait photographer Gary Box. He says there are three things that make up a portrait that may be viewed as too sexy.

1. Outfit
2. Pose
3. Facial expression

His rule is that you can get away with using any two of the above three at one time. However, once you combine all three, you will have an image that has crossed the line and officially become too sexy. So if a senior brings in an outfit that will expose quite a bit of cleavage be careful with either the pose or expression (as well as being willing to talk with the parent and senior about the outfit chosen and how it may look).

Now, here may be the bigger and more important question – even though you've pleased the client how do you choose an image for your advertising? It was a question that was raised in the spa Talk membership forum just the other day – “Is this advertisement too sexy?”

I recently read a great article about branding and marketing about how a funny image or advertisement is good but it does not compete with an image that creates shock. Both engage emotion, but the one that shocks causes movement in the viewer more often than the one that is funny. In all honesty, if you aren't getting an email, phone call or letter every year or so that says you've crossed the line, you may not be close enough to the edge.

Again, it's a fine line. A really fine line. When working to attract clients and potential clients to your studio the reality is that sex sells, but at the same time too much sex repels. The same three rules apply in advertising, like they do in shooting an image for a client.

It's important to remember that in the end, high school seniors are kids. Many times they aren't even 18 years old. They aren't models, how you project them in your advertising can change the image they carry in their world (both for good or bad).

So, what do you think – have you been told that your work crosses that line? Do you agree that none of the images of high school seniors are “too sexy”, just right or completely inappropriate? Comment below. A dialogue is usually a spark for bigger ideas. Your voice is heard here!

This is a guest blog by Sean Low, President of The Business of Being Creative which “provides practical business advice to those in the business of being creative.” You have got to follow Sean on Twitter.

Of all the issues confronting creative businesses, photographers included, pricing tops the list. Always. What to charge? How to charge? Can you charge? When to charge? If only there were a right answer. Unfortunately, there is not. However, there is definitely a wrong answer.

If you are not transparent and do not have a pricing model that supports your philosophy, you will go broke in a hurry. Why? You will never be able to create the trust with your client necessary for you to do your best (or even adequate) work. If you are trying to “bury” expenses and/or profit in a single number or “package”, your clients will sense it and will (rightfully) question your integrity. They will be waiting for the other shoe to drop, even if there is no shoe. So the better question to ask yourself is: have I communicated the value of my art and does the way I do things support that value.

You can earn a fair return if you a transparent with your pricing and your business model.

Fundamentally, photographers are in two businesses: 1) selling the act of creating the image; and 2) selling the products derived from the image (i.e., prints, albums, etc.). In a perfect world, a photographer would be able to make money on both businesses. However, in the digital age and with competition the way that it is, it is increasingly difficult to earn a fair return on your investment of time and energy in either business.

The pricing pressure on the act of creating the image has never been greater. You need only take a look at Groupon offerings by photographers to witness the price of creating an image approach zero. On the other hand, services like the Album Boutique make it very difficult to extract value from selling products associated with an image. Moreover, many clients are placing photographers in the very difficult position of having to give up control of their art and just turn over a CD of hi-res images. Just say no.

To move forward, you have to bring integrity to your process. You can earn a fair return if you a transparent with your pricing and your business model. You should be able to say to your client that this is what you need to create your images. If it means having a second or third shooter, then you should lay this out too. Despite what you might think, clients do know you are in business and have to pay things like rent, utilities, payroll, etc., so if you do tell them that you charge say fifty percent on your and your staff’s time they will probably accept it. Likewise, if you require a certain quality of album be purchased (it is the legacy of you and your art after all), they will likely accept that too. Again, you are entitled to earn a fair return on your investment of time and energy – enough to sustain your business. The key is to be transparent to what that is with your clients. Transparency builds trust and is really the only currency you trade in.

Ignore those that would compete with you solely on price. Focus on what you offer and why you do things the way you do. Be uncompromising when it comes to the integrity of your art and completely transparent in what it takes for you to create it. Your ultimate value has nothing to do with the price you charge and everything to do with how you communicate. Those clients who need (read: not just want) your vision will pay for it. It is up to you to move them from want to need.

It's your turn to sound-off. What are your challenges when presenting pricing to your clients? How do you approach pricing – is it transparent or do you make it difficult for your clients to get a good read on you and your business? What issues do you encounter when discussing pricing with your clients?