Best Business Practices for Photographers [69]
Other downward pressures are more demands for all rights, buyouts, work-for-hire (more on these later in this chapter), hobbyist photographers who claim to be working photographers capable of filling client needs, and market forces in my community. In the coming year, I am looking to increase my rates again because that previous bump from $125 to $150 didn't cause the reduction in assignment load I had expected.
In the scenario with rates based mostly on creative and not so much on time—often editorial assignments or corporate/commercial/advertising work—how I adjusted my rates did not occur with any more fanfare than necessary. Many of my clients, although repeat clients, are accustomed to receiving estimates before each assignment, so increases were less perceptible, and I certainly maximized my ability to increase my rates during the transition to digital. This not only covered the costs of the transition, but also an increase in overall profitability per assignment. Magazine assignments that used to be $750 including expenses are now in the $1,300 to $1,500 range.
Of course, it's imperative that you (internally) have an hourly rate that you use and apply to your calculations to arrive at your rates as a baseline for services rendered, from photographic to post-production and such. This is not an external figure that you share with clients; rather, it's a figure that helps ensure that you are paid that fixed salary from the CODB calculator.
Surveying Your Competition: How to Gather Knowledge Without Risking a Price-Fixing Charge
One of the ongoing issues among professional trade associations is that they cannot endorse, encourage discussion about, or advise a particular set of rates.
Law.com provides the following definition of price fixing:
n. a criminal violation of federal antitrust statutes in which several competing businesses reach a secret agreement (conspiracy) to set prices for their products to prevent real competition and keep the public from benefiting from price competition. Price fixing also includes secret setting of favorable prices between suppliers and favored manufacturers or distributors to beat the competition.
Discussing with your colleagues and competitors what prices they charge (or would charge) for a particular assignment or type of assignment is not price fixing. If you agree to charge a set price and are among "several" (as noted above) companies that "prevents real competition," then you have a problem. However, many trade associations have worked diligently to avoid even the appearance of a price-fixing charge—an understandable measure of self-preservation, because no one wants to be the subject of a Federal Trade Commission probe. Back in the 1980s, ASMP produced a well thought-out survey of its membership as to the prices they charged (and presumably would charge in the future) for their services. Despite this well-intentioned work product, the Federal Government took a dim view of this and expressed as much to the ASMP in no uncertain terms. This has caused a chilling effect regarding pricing information and how (and by what means) it is shared. However, this should not discourage you from appropriately reaching out to others about pricing you may be less than familiar with.
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NOTE
I submit that it would be very difficult to "prevent real competition" in the photographic marketplace with so many providers.
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Perhaps your reason for inquiry is that although you can produce the final product you're being asked to, you might not be familiar with all that goes into it. Suppose it's aerial photography, and you don't know the risks to life, delays in weather, and pre-production and post-production demands that go into the final product. A call to an aerial photographer—quite possibly one far outside your market—could yield insights that would give you the knowledge necessary to prepare a proper estimate and equipment rental needs, so that you're not selling yourself short and you don't end up taking a loss on an assignment because of all the non-behind-the-camera