You may remember the article I wrote a few weeks ago about the incredible difference that in-person sales can make in the bottom line of your business. The only type of photography business that I don’t recommend in-person sales for is a business that is focused exclusively on selling an all-inclusive digital collection.
There are still a variety of pitfalls that you need to avoid with the all-inclusive digital model though!
- Please do not sell digital files simply because “it’s easy”.
Instead, really get into the mind of your target client. Think about the type of client that you hope to attract to your business and ask yourself if they really want digital files. In my particular business, the answer is no. My target client is a young professional or older empty nester. The young professional is busy, they don’t have the time to deal with creating something with their images and will gladly pay me to do that for them. Now this particular client does want the digital files as part of their purchase, just not as their only purchase. It’s the same answer but for a different reason for my empty nester clients. They just don’t want to spend the time on the computer, figuring out how to manage the files and decipher another online ordering situation. They much prefer that I create a final product for them.
It is entirely possible that your target client wants the files and only the files. I have seen some very successful photography businesses that are based solely on digital collections. I’m just asking you to really think of why you are offering digital files.
- What do you really want to sell?
Again, digital files are easy but is it the right answer for your business? When you sell the digital files, especially when you sell the digital files exclusively, then you give up control of how those final images are printed. Even though you give your client a list of “approved” labs they very well may print them at Target.
Pay attention to how you feel when you sell a beautiful canvas vs. the digital files. If there is a part of you that is slightly bummed when you aren’t selling the final product maybe it’s time to reconsider your business model to focus on those products that make you happy!
- Don’t create a salary cap for yourself!
If you have really thought about the first two questions and you do want to build your business on a digital collection great! The next thing that you need to determine is profitably pricing those files. Repeat after me: the digital files CAP YOUR SESSION AVERAGE! I’m not saying that you can’t add on sales afterwards, but you certainly can’t count on it for most of the sessions.
You need to price your digital files not at the minimum that you need to make, but at your happy place. The challenge with digital files is that they don’t follow the Cost of Goods Sold equations as easily as products and are more subjective. It’s easy to sell yourself short and I see people doing it ALL OF THE TIME.
Determine what you business expenses are, determine how many sessions you would like to have a year. Hopefully you are choosing a number of sessions that won’t require you to stay up until 3am every night, becoming burnt out on your business and hating life. Determine how much income you need to make, don’t forget taxes. Then using those numbers you can get an idea of what your session average needs to be; that should be your MINIMUM digital file collection price.
You can download the FREE Income and Expense Projection form to help you with those numbers here!
I’m pretty confident that the number will be in the neighborhood of $1000-1500 per session. Unless you are doing 300 sessions a year, staying up all night and not sleeping, you will be hard pressed to find a way to make a profit selling a $300 CD.
Disclaimer: If you are currently charging $300 for a CD of your images, please do not be offended by this post. My intention is not to call you out but instead to help you realize that it is very challenging to build a sustainable business at that price point. I believe that if you want to have a photography BUSINESS then it must be treated as one and it must be run profitably. There is absolutely NOTHING wrong with having a photography hobby and photographing your friends for free or in exchange for their gifts of appreciation like gift cards to your favorite restaurant…yum.
If you need help with your pricing and want to create a sustainable pricing model, whether that is based on digital files or products, I would be happy to help you with an online mentoring session.