How to Price Wedding Photography Packages for Profit
How to price your photography packages for profit? Is there more than one method to set photography prices? How to stay profitable in the super competitive Toronto wedding photography market. The answers to those questions and more, can be found below.
Wedding Photography Pricing Models
For a Toronto wedding photographer, running a successful business can be tough when everybody is a photographer. Pricing your packages correctly can make the difference between profitability and failure. Pricing strategies can help you achieve your goals: maximize profit, increase the number of weddings photographed, increase market share, etc. Let’s analyse a few models from the most basic ones to the most sophisticated. The following models allow you to achieve your pricing strategy goals.
Not Recommended! "Pick a Number" Pricing Model
Many wedding photographers have no idea how to price his packages. They quote random numbers, hoping it is the right price. When the bride asks for a discount, the photographers cannot defend their prices and packages. The bride senses the despair and starts nickelling and dimming the photographers. Pricing your packages that way is not profitable and will not allow you to be in business for long. The solution is to improve your craft and move up the food chain. Do not apply this pricing model and keep reading.
Follow the Leader Pricing Model
After a while in the wedding industry, our photographer knows the market leaders, and keeps their prices in consideration when setting his own pricing and packages. This approach is superior, as the leaders know the wedding photography market and are profitable.
Cost Plus or Markup Pricing Model
More sophisticated photographers have a sense of what total costs are and determine the prices of a wedding using costs as a starting point. On top of the costs they ad a markup to ensure the profitability of the studio. The goal of this pricing model is to secure a profit margin. Its success depends on accuracy of the cost calculation and on the predictability of the future costs. For example, if a destination wedding photographer books a last minute wedding and the plane tickets are twice what he paid last year, he will not make money on that wedding.
Tiered Pricing Model
Derived from the basic pricing models employed by car rental and airlines, this pricing model works when the demand fluctuates. We all know that August is the busiest month for weddings. 23% of all weddings in Toronto occur in August. Some photographers use a tiered pricing model and have summer prices and winter prices for their wedding packages.
Pricing Packages Based on Capacity Utilization
In Toronto and worldwide, each photographer can shoot a limited number of weddings per summer. Let’s assume you can photograph 20 weddings in total if you make an effort, though you probably want only 15. The last 5 weddings you will shoot only if it is worth the effort. The lowest price you will accept is the one given by the Cost Plus model, say $3,000m which is your floor price, and the best price you can get, in your opinion is $5,000. The latter price is called ceiling price. What you do, you divide the difference between the ceiling price and floor price by the number of weddings less 1. That will give you the amount you need to add every time you book a wedding. Here is the example.
Amount price change = (price ceiling – price floor)/number of weddings ($5,000-$3,000)/20=$100.
After you book the first wedding at $3,000, you quote $3,100 for the second wedding, $3,200, $3300 and so on.
In the slow season you might probably reduce the floor price to adjust for lower demand.
It is easy to see that the profitability of this method greatly exceeds the previous ones. The challenges in adopting this model is that you will need to create custom quotes for every bride as opposed to simply emailing them your standard Prices and Packages.
Value Based Pricing
When demand for your wedding photography services is high enough, you can create custom quotes tailored for every bride’s needs. The purpose of this model is to avoid leaving money on the table and law firms use it with great success. In Toronto, there are a few high-end wedding photography studios using this pricing model. You will never see a price list on their website and one example is Mango Studios.
There are a few pricing models you can use to build your wedding photography packages. Among them, follow the pricing leader, tiered pricing and cost plus are easy to implement and guarantee your profitability.