Economics 101 for Photographers | Or Why You Shouldn’t Be Booking Every Client

I must begin this post with a few caveats. Firstly, I am far, far from being an expert on pricing a photography business. And secondly, my goal in writing about this subject is to open the door for dialogue on this topic–I’d love to hear others’ thoughts. And lastly, if you’re looking for a post with beautiful wedding photos, I’d recommend skipping this and just checking out my weddings posts. Or wait, here’s one of my favorites from my brother-in-law’s San Antonio wedding last February:

don strange ranch wedding photo

OK, back on topic–caveats aside, I’d like to think my economics minor in college hasn’t been for naught. And being married to an economist should count for something, right? So let’s jump right in…

A few months ago I read a blog post by a photographer who made a fantastic claim: They had booked every wedding client they’d ever consulted with except for two. And in those two exceptions, it had been a matter of one couple not deciding soon enough and the other just not interested. (And from their blog, it appeared business was booming…so they weren’t talking about 5 people here). Clearly it was the photographer’s excellent sales and marketing strategy that resulted in such a high booking rate, or at least that’s how they explained it. They simply couldn’t understand why other photographers whined and wailed about poor bookings–even in a bad economy. They had obviously found the best sales method.

I was impressed. But skeptical. It sounded too good to be true.

On second thought, it sounded horrible.

Let me explain. Realistically, weddings usually occur on weekends–with the majority still taking place on Saturdays. So the average wedding photographer probably has around 40-50 days that they can shoot weddings in a year, not accounting for any weekends they’d like to spend with their own families. If you work in a cold winter climate, you can also pretty much assume most weddings will be in the summer, leaving you with even fewer viable dates for work.

Therefore, every wedding photographer’s goal should be to maximize the profitability of the days they do work (if they want to stay in business). That’s because there’s a hidden cost in the wedding photography industry that’s rarely mentioned and never shows up on tax reports: opportunity cost.

Ah yes, that measurable cost of nothing. Or rather, the cost of not doing something else. It’s easy to understand. If I get paid $500 dollars to photograph a wedding when someone else would have gladly paid me $5,000 to shoot their wedding on the same day, I’m out $4,500 in opportunity cost. Yes, I booked that wedding…but I also walked away from $4,500.

So getting back to the article. Being my skeptical self, I thought there were two options. One–the photographer really did have incredible sales skills that couples couldn’t say no to. Or two–the photographer was under-priced and too many couples could afford them. By too many, I mean that the photographer was having to turn many other couples away who would have been willing to pay more if they could have just secured the date.

A quick perusal of that photographer’s prices in comparison with other local wedding photographers confirmed my suspicions. The photographer’s prices were much, much lower than the average price of their competitors. No wonder everyone wanted to book them! They were the best deal in town!

So while they were patting themselves on the back for their excellent sales strategies, all I could see were the hundreds or thousands of dollars in lost profits they were accruing in every booking they were making.

Quite simply, you shouldn’t be booking every person who walks through your door or calls you on the phone. If you are, you’re not efficiently using your resources–your finite time.

It’s simple supply and demand. Yes, I went there. Remember those awful graphs you had to draw in economics class? One line going up, the other going down, and a happy meeting in the middle. That’s what you’re searching for–that happy meeting place–when you’re getting the most profit for your time and resources at the perfect price people are willing to pay.

And look I drew a graph!
a supply and demand graph of wedding economics

That perfect price, of course, is going to vary from photographer to photographer and from location to location. All I know is if you’re running out of available dates to work 12 months in advance and you’re turning many couples away, you’re not valuing your time correctly. It’s time to raise your prices and start maximizing your profit!

Lastly, of course, this is all assuming you want to maximize your profits. I know some people who prefer to keep their prices lower than what they could be charging because they believe wedding photography should only cost a certain fixed amount. If that’s how you feel, then by all means, charge what you’d like. And in a way, I understand where they’re coming from. At the same time, these same photographers bemoan the fact they they have too much work to do in too little amount of time. My goal isn’t to squeeze my clients for every last penny I can get. I want to provide them with the best service and products at a sustainable price for my business. And I know that being profitable is the key to staying in business and reinvesting in myself and my resources (equipment, training, time-off, etc.) The alternative is burn out from overworking at a below market price.

mary - Great point, Aliy! Clearly the demand for your services didn’t warrant that much of a price increase if all your bookings stopped. You probably could have raised your prices…but maybe not by so much. It’s difficult to figure out what that one perfect price is for you. It’s not the same for everyone. So you weren’t loosing opportunity costs…you were charging higher than the demand for your services.

Aliy - Mary,

Great article. And I love your Graph, I’m sure I’m not the only photographer who is a visual learner! 🙂

Something about that giant hatched area with the words “LOST PROFITS” that really makes you think. I completely agree with what you are saying and your perspective… on paper.

Unfortunately in reality I’m unable to agree 100%. I had clients banging down the door to get in when I was priced $500-$1000 my first year. Now that I have raised my prices to $1500+ I have turned away several referrals who were unable to book at my new rates, with out getting people in the door to replace them. Fortunately I’m in a position where there is a second income in our house, but If I weren’t (and I wanted to make it as a Pro Photographer) I would have no choice but to accept those lower bookings while trying to figure out how to attract the ‘bigger fish’ so to speak. While my Opportunity Costs would be great, opportunity cost doesn’t pay the bills.

michaelwill - thanks for posting this mary! great stuff.

Milla - I love this Mary. Thanks for taking the time to post about it! There’s a lot of information here! In fact, I’m going back to read it again now…

Jeremy G. - Great article Mary.

Your email is never published or shared. Required fields are marked *

*

*