High Prices and Lower Volume or Low Prices and Higher Volume

[aerialimagery]

Just curious about what others have experienced.

I've done aerial photography by airplane and helicopter for many years and now by drone (in addition to still using manned aircraft). I have often thought while flying from job to job about how much lower I could price my work if I could get a lot of work in a particular area to do at the same time.

So I have tried very low pricing to that end and have found that it doesn't have that much effect on increasing business.

The same seems to apply for doing aerial photography by drone. I would happily charge just $100 to do jobs and would do that all day if they were all grouped in one area. But low pricing doesn't seem to attract much if any additional business.

At least that's been my experience.

Of course it's not either/or. It would be great to have high prices AND high volume and I had a few years of doing that and that was nice.

 

[BigAl07]

We quote per the job and keep our rates fairly standard. The most common time I lower my rates is if the client gives me more than 3 jobs in the same area to be done at the same time. Other than that our rates are consistent across the board.

When we started out our rates were a bit on the low side and we found through trial and error we could raise them and somehow we actually got more business for a couple of years. Then Part 107 came on STRONG and John-boy doing this type of work in his middle school spring break cut pretty deep. Our rates are a pinch lower today than they were 2 years ago but they remain fairly consistent across the board more often than not.

 

[John Decker]

Just curious about what others have experienced.

I've done aerial photography by airplane and helicopter for many years and now by drone (in addition to still using manned aircraft). I have often thought while flying from job to job about how much lower I could price my work if I could get a lot of work in a particular area to do at the same time.

So I have tried very low pricing to that end and have found that it doesn't have that much effect on increasing business.

The same seems to apply for doing aerial photography by drone. I would happily charge just $100 to do jobs and would do that all day if they were all grouped in one area. But low pricing doesn't seem to attract much if any additional business.

At least that's been my experience.

Of course it's not either/or. It would be great to have high prices AND high volume and I had a few years of doing that and that was nice.

I was a computer tech for many years, and branched out on my own by charging half the price others were charging.
I got the customers who were *expletive* at paying, partly because I'd attracted the people with no money, partly because some thought I was only half as good as the rest which allowed them to think not paying was justified..
As my son told me: if you don't value yourself, why should your customers?
I put my prices up to match and had 15 years of incredibly profitable work, good customers, and loads of free time.

My advice is the same as my son's.

 

[R.Perry]

Many years ago I did some flying for some of the Napa valley wine folks. One man ask me what the difference is between a 10 dollar bottle of wine and a 50 dollar on. I didn't have a clue, he said 40 dollars, but people will pay the fifty day in and day out because they think it is better.
I really don't know anything about wine, but why would I work for less when I can make more?
The only thing is if you want the big bucks, you need to deliver big buck work or you will be sitting around hopping the phone will ring.

 

[mdurbanek]

This topic comes up again and again on these forums. The answer is simple, and only requires some simple math. Yet I have never seen it addressed properly.

This business is full of people who don't know how to compose a business and marketing plan. So they destroy any market they enter.

If a moderator would like for someone to establish a thread to explore this process, I would volunteer. But - many of you don't want to hear what I have to say.

 

[BigAl07]

This topic comes up again and again on these forums. The answer is simple, and only requires some simple math. Yet I have never seen it addressed properly.

This business is full of people who don't know how to compose a business and marketing plan. So they destroy any market they enter.

If a moderator would like for someone to establish a thread to explore this process, I would volunteer. But - many of you don't want to hear what I have to say.

I can't speak for the rest of the group (staff and or members) but I for one encourage you to break it down.

 

[Red90]

Work smarter, not harder.

You could go out all day every day for a couple of hundred - or work one day for a thousand & relax for the rest of them.

I don’t mean to sound glib, but you can run yourself into the ground working for people who don’t value you, your kit, training & expertise. Far better (IMHO) to try and work with people who will pay a decent rate for each flight - as others have said you just need to offer a quality service back!


Cheers,
Martin.

 

[Levitated Media]

I can't speak for the rest of the group (staff and or members) but I for one encourage you to break it down.

I'll second this...Information is an invaluable tool, maybe I'm pricing incorrectly and losing bids that way and your method could assist.

 

[mdurbanek]

OK BigA107, but what do I call you for short? Al? Big? BigAl? A1? 007?

I will begin my tutorial tomorrow continuing in this thread. After PART 1, I'll answer questions and rants for a day or two and then post PART 2 and so on. I think there will be three or four major sections, but I guess it could expand.

This is The Wild West in a new industry, and change will seem overwhelming. But when I was fresh out of Brooks Institute and on my first job, I was trying to make the perfect photograph and stressing about it. I was ranting to my boss about all the things I wanted to do, but the schedule was impossible. He told me "Calm down. This is the time and day we have. Do your best and remember: "There's nothing new under the sun." Meaning, I was unlikely to find a new solution that had never been found before.

There is still nothing new under the sun. See you tomorrow.

 

[mdurbanek]

OK BigA107, but what do I call you for short? Al? Big? BigAl? A1? 007?

I will begin my tutorial tomorrow continuing in this thread. After PART 1, I'll answer questions and rants for a day or two and then post PART 2 and so on. I think there will be three or four major sections, but I guess it could expand.

This is The Wild West in a new industry, and change will seem overwhelming. But when I was fresh out of Brooks Institute and on my first job, I was trying to make the perfect photograph and stressing about it. I was ranting to my boss about all the things I wanted to do, but the schedule was impossible. He told me "Calm down. This is the time and day we have. Do your best and remember: "There's nothing new under the sun." Meaning, I was unlikely to find a new solution that had never been found before.

There is still nothing new under the sun. See you tomorrow.

OK, here's my attempt to suggest a way forward in this business. I was going to do this in a few different parts, but I decided to be a little more economical and get it all out. So, critics - Fire Away!

Photography: hobby vs. profession

Photography is a fun and popular hobby. So is sUAS. Combine them and you have an unlimited horizon for self-satisfaction. As long as you keep the activity stress-free.

Photography as a business is a serious matter, as is any business. Most of us who become professional photographers do it because we have a passion. Everyone wants to work a job they enjoy and at which they excel. The "excel" part takes more that passion: it takes education, research, and generates a lot of stress.

Much of the hard work involves determining how to make a living. Knowledge, sales ability, communication and organizational skills must be developed. Brutal honesty with the guy in the mirror surely helps.

Many hobbyists turn to photography as a side or second job. Some develop to the point where they provide a good product at a fair price. But mostly, they LEAVE MONEY ON THE TABLE. And that's a shame.

So my first admonition is to decide what you are. Please, either enjoy your hobby, or do the work it takes to become a professional, even a part-time one. Don't destroy a market where you don't belong in the first place. DON'T LEAVE MONEY ON THE TABLE.

Markets

A market is composed of geography, products, buyers, and sellers. With a little research, you can find everything you need to know about your market. You determine your offering, your service area, who buys at what price, and who sells at what price. There will be a range of product quality, purchasing ability, and pricing power.

Your market is presently being served by (mostly) full-time professionals. The pricing part of the market has been developed over the years by pros determining how many days they need to shoot in order to cover their expenses and make a profit.

Someone earlier in this thread said you can shoot every day for small $$ or shoot one or two days for large $$. No offense, BUT THAT IS NOT TRUE. You cannot shoot consistently more than a couple of days a week. Arranging for each project, communicating with clients, post production and administrative stuff will take up all of the rest of your time. (Caveat: this is assuming you're a one-man band. You can always hire employees to do all of that other stuff, but then you have REAL problems!)

Math - Full Time
(These numbers are for illustration only. Determine yours carefully)

So - let's say Pro "A" has $3K per month of living expenses, and he wants to add $1K to sock a little away. His fixed expenses are $300 per month, and his variable expenses are $100 per assignment. And of course there are taxes and deductible expenses. So let's set his 'nut' at $6100 per month. If he is able to book 2 days per week, that's 8 days per month.

This means that if he runs a really tight ship, he'll need to charge $750 per assignment, minimum (or approximately 64 hours at $100 per).

Math - Part time

Just because you have a day job or a working spouse (or you're a trust-fund baby) doesn't mean that you should LEAVE MONEY ON THE TABLE.

Now, you have legitimately lesser expenses. You probably haven't invested as much as Pro "A", and you probably don't have some of the other expenses he has. You may be able to deliver as good a job as your pro competition (or you may not) at a lower price. Or maybe you're a real hot-shot - if so charge more!

But DON'T LEAVE MONEY ON THE TABLE. You probably don't have to bid that full day job at $750. But for crying out loud, don't bid it at $250! Don't leave $500 on the table. YOU ARE DESTROYING THE MARKET. If you're any good you can bid $600 and still get the job.

Destroying the Market vs. Disrupting the Market

Good competition is healthy. It is an important part of the making of a market. Full time pros have advantages over part-timers and vice versa.

Disrupters have been all the rage lately - Uber, AirBnB, SpaceX to name a few. They're finding opportunities in established markets and they change everything. If they aren't profitable, or if their business plan fizzles, they'll be gone.

Market destroyers, however, do real financial and moral damage. The race to the bottom that starts with "But I can do it cheaper" can be fatal to good creative people trying to make an honest living. If you want to read about a recent spectacular failure that cost investors billions and caused real human jeopardy, search Lizzie Holmes and Theranos.

Evaluate your self-image, respect that guy in the mirror, and do work of which you'll be proud. Get paid a fair amount for your work. AND DON'T LEAVE MONEY ON THE TABLE.

 

[ClipCopter]

I can't speak for the rest of the group (staff and or members) but I for one encourage you to break it down.

I'll throw in on this as well. Please break it down.

Edit: Teach me to reply before reading the whole thread. (facepalm)

 

[Levitated Media]

Alright so in an effort as a hobbyist trying to turn this into a part time / side hustle, how do I figure out the market without destroying the market and leave money on the table? Also how do I weed out the clients who are seeking the destroyers and not those who want to perfect and produce quality work? In addition, what's the recommended method to hitting a target market?

Also for pricing, is a day rate more efficient then hourly or what's the market standard?

 

[aerialimagery]

The assignments I was referring to would take 10 to 15 minutes each, not all day.

For example, when I did a lot of aerial photography from airplanes, my average billing per client was about $500. I would group assignments according to a particular area, so if I did 10, the gross would be $5,000 for that flight. The photography time per photographed site rarely exceeded 10 minutes. Then there was the travel time flying between the sites. The total time might be around 3 or 4 hours. But if I would somehow have been able to double the amount of work in the same area it would not have doubled the time. It would have added an additional hour, for a billing of $10,000.

I've had many times when I did $10k or more in one flight, but sadly it's no longer the case.

In theory, I could still have made good money charging much less.

It's not the same situation with doing photography by drone, but there are some parallels. For example it still only takes me about 10 to 15 minutes to photograph a site plus travel time to the site. (I'm referring to taking pretty pictures of an industrial plant that they would use for their brochures and wall hangings, etc. I suppose many here are doing other types of work that are more time-intensive). I charge about $400 to $600 to do that kind of work. The point I was making is that I could easily photography 15 sites in a day, IF they were close to each other, and would happily charge only $100 per site IF I could do that on a consistent basis. But my experience so far is that I cannot get many low-paying customers in one area and have to be content with higher prices and customers more spread out. What was advantageous in using an airplane, in spite of the costs, is that the targets could be far apart, but the travel time between them going at 120 mph with no traffic problems made it possible to cover a lot of ground in a few hours, something that could not be duplicated by driving to each site and then photographing by drone.

I don't believe anyone has the power to "destroy" a market. Prices are what the are for the value rendered. If prices can be sustained at low levels then there is a reason for that, and the market merits "destruction." My experience, however, is that at least for the type of drone photography I do, that there are few who do it well, and those who do will not be charging extremely low prices.

 

[BigAl07]

OK BigA107, but what do I call you for short? Al? Big? BigAl? A1? 007?

most call me Al, Allen, or BigAl just don't call me late for supper LOL.

 

[BigAl07]

@mdurbanek you sound exactly like one of my business professors. At the time I was thinking about anything but what he was saying but when I got into the Real World I soon realized he was spot on in every respect.

You've NAILED IT!!

 

[mdurbanek]

Alright so in an effort as a hobbyist trying to turn this into a part time / side hustle, how do I figure out the market without destroying the market and leave money on the table? Also how do I weed out the clients who are seeking the destroyers and not those who want to perfect and produce quality work? In addition, what's the recommended method to hitting a target market?

Also for pricing, is a day rate more efficient then hourly or what's the market standard?

Well, you have some education to attend to. Get on the web (this forum and others), find out everything you can about how sUAS are used. Search for those kinds of business in your area. Find people who are buying and ask them what they pay. Go to the Chambers of Commerce, perhaps a Rotary meeting as a guest, local ag associations, energy associations, the marketing departments of utility and construction companies. Develop a list of questions for these people and write down the information.

As for weeding out undesirable clients, that's a never ending process. But sometimes, you can educate an unknowledgeable prospective client and develop a relationship that's good for both of you.

Once you identify your interests, and your targets, reach out to them. Try calling first (although almost nobody answers their phone anymore) and if they don't pick up, leave a message (write a script first). Then find a valid email address if they don't call back. Finally, if nothing else works - it's time for an in-person cold call. They probably won't have time when you show up, but you may have broken the ice. If they say "I already have somebody" BINGO. You just identified a confirmed buyer. Keep in touch - someday their regular guy will be unavailable and you want them to think of you.

You must do the above steps for everyone on your list. And you must keep adding new people to your list. In your position you are the PIC, the photographer, the sales team, the bookkeeper, the janitor, and so on.

Regarding pricing, once again the market research will tell you the norms in your area. Take it from there and make it work for you. Anything takes at least a half-day: taking notes on a project, communicating with others involved, checking airspace class, obtaining permissions, planning your format, etc.

Finally...GET CREATIVE!!! I sense in the tone of your note that (like a lot of people on this forum) you might be fearful of making mistakes. Don't be! It's the only way anyone ever learns anything of value. LEARN BY DOING.

Good luck!

 

[BigAl07]

You must do the above steps for everyone on your list. And you must keep adding new people to your list.

It's a never ending process. You can never get "comfortable" where you are because the moment you do someone else will step in and swoop in on your client list. I can tell you from experience that when this happens you've got to step up your game and quickly.

In your position you are the PIC, the photographer, the sales team, the bookkeeper, the janitor, and so on.

#Truth! You've got to carry a ton of different hats and you need to be good and "Comfortable" in each of them.

Finally...GET CREATIVE!!! I sense in the tone of your note that (like a lot of people on this forum) you might be fearful of making mistakes. Don't be! It's the only way anyone ever learns anything of value. LEARN BY DOING.

Good luck!

Absolutely.
We LEARN from our mistakes and we just need to make sure we don't keep making the same ones over and over again.

 

[mdurbanek]

Hello AerialImagery - my comments below in RED.

The assignments I was referring to would take 10 to 15 minutes each, not all day. Understood. But you have time prior to the shoot in planning, compliance, and communication. As I stated somewhere else, any assignment chews up a half-day. I'm suggesting that thinking about that time frame makes it easier to see what you "nut" is and figure out how to crack it.

For example, when I did a lot of aerial photography from airplanes, my average billing per client was about $500. I would group assignments according to a particular area, so if I did 10, the gross would be $5,000 for that flight. The photography time per photographed site rarely exceeded 10 minutes. Then there was the travel time flying between the sites. The total time might be around 3 or 4 hours. But if I would somehow have been able to double the amount of work in the same area it would not have doubled the time. It would have added an additional hour, for a billing of $10,000. You're attempting to maximize your time and that's smart. And your pricing sounds in line. Whatever you charge per shoot, if they're different clients, it's OK to charge each the full rate (whatever that is) even if you save a few bucks by combining the jobs. HAVING SAID THAT: I have run promotions for existing customers where I've offered a sweet deal at flat rate for a short time - a flash sale - and received a dozen or so assignments. I'd hit the road and come home when they were all done, reducing my expenses much like you described.

I've had many times when I did $10k or more in one flight, but sadly it's no longer the case. Times do change.

In theory, I could still have made good money charging much less. We never stop learning.

It's not the same situation with doing photography by drone, but there are some parallels. For example it still only takes me about 10 to 15 minutes to photograph a site plus travel time to the site. (I'm referring to taking pretty pictures of an industrial plant that they would use for their brochures and wall hangings, etc. I suppose many here are doing other types of work that are more time-intensive). I charge about $400 to $600 to do that kind of work. That's reasonable and profitable if you don't have to drive too far. The point I was making is that I could easily photography 15 sites in a day, IF they were close to each other, and would happily charge only $100 per site IF I could do that on a consistent basis. But my experience so far is that I cannot get many low-paying customers in one area and have to be content with higher prices and customers more spread out. Like I said above, that promotion was my best effort at cat herding. It's difficult to persuade customers to cooperate! What was advantageous in using an airplane, in spite of the costs, is that the targets could be far apart, but the travel time between them going at 120 mph with no traffic problems made it possible to cover a lot of ground in a few hours, something that could not be duplicated by driving to each site and then photographing by drone. And no TSA!

I don't believe anyone has the power to "destroy" a market. Prices are what the are for the value rendered. If prices can be sustained at low levels then there is a reason for that, and the market merits "destruction." In Southern California, the entire Real Estate market has been, in my estimation, destroyed first for terrestrial photography, and now for sUAS aerials. I've been doing this for 34 years, and I'm not going to shoot a house for a hundred and fifty bucks. My experience, however, is that at least for the type of drone photography I do, that there are few who do it well, and those who do will not be charging extremely low prices.

Note to everyone: this is a gentleman who knows his product and what it is worth.

 

[mdurbanek]

Hi Allen...my comments in RED.

It's a never ending process. You can never get "comfortable" where you are because the moment you do someone else will step in and swoop in on your client list. I can tell you from experience that when this happens you've got to step up your game and quickly. It has happened to me. But more often I have been on the other side. So many people say "I've got a guy", but sooner or later their "guy" is unavailable, sick, or on vacation, and they'll remember me.



#Truth! You've got to carry a ton of different hats and you need to be good and "Comfortable" in each of them. My primary weaknesses are the "bookkeeping" and "janitor" hats.


Absolutely.
We LEARN from our mistakes and we just need to make sure we don't keep making the same ones over and over again. I usually make them at least twice

 

[mdurbanek]

I can't speak for the rest of the group (staff and or members) but I for one encourage you to break it down.

OK, here's my attempt to suggest a way forward in this business. I was going to do this in a few different parts, but I decided to be a little more economical and get it all out. So, critics - Fire Away!

Photography: hobby vs. profession

Photography is a fun and popular hobby. So is sUAS. Combine them and you have an unlimited horizon for self-satisfaction. As long as you keep the activity stress-free.

Photography as a business is a serious matter, as is any business. Most of us who become professional photographers do it because we have a passion. Everyone wants to work a job they enjoy and at which they excel. The "excel" part takes more that passion: it takes education, research, and generates a lot of stress.

Much of the hard work involves determining how to make a living. Knowledge, sales ability, communication and organizational skills must be developed. Brutal honesty with the guy in the mirror surely helps.

Many hobbyists turn to photography as a side or second job. Some develop to the point where they provide a good product at a fair price. But mostly, they LEAVE MONEY ON THE TABLE. And that's a shame.

So my first admonition is to decide what you are. Please, either enjoy your hobby, or do the work it takes to become a professional, even a part-time one. Don't destroy a market where you don't belong in the first place. DON'T LEAVE MONEY ON THE TABLE.

Markets

A market is composed of geography, products, buyers, and sellers. With a little research, you can find everything you need to know about your market. You determine your offering, your service area, who buys at what price, and who sells at what price. There will be a range of product quality, purchasing ability, and pricing power.

Your market is presently being served by (mostly) full-time professionals. The pricing part of the market has been developed over the years by pros determining how many days they need to shoot in order to cover their expenses and make a profit.

Someone earlier in this thread said you can shoot every day for small $$ or shoot one or two days for large $$. No offense, BUT THAT IS NOT TRUE. You cannot shoot consistently more than a couple of days a week. Arranging for each project, communicating with clients, post production and administrative stuff will take up all of the rest of your time. (Caveat: this is assuming you're a one-man band. You can always hire employees to do all of that other stuff, but then you have REAL problems!)

Math - Full Time
(These numbers are for illustration only. Determine yours carefully)

So - let's say Pro "A" has $3K per month of living expenses, and he wants to add $1K to sock a little away. His fixed expenses are $300 per month, and his variable expenses are $100 per assignment. And of course there are taxes and deductible expenses. So let's set his 'nut' at $6100 per month. If he is able to book 2 days per week, that's 8 days per month.

This means that if he runs a really tight ship, he'll need to charge $750 per assignment, minimum (or approximately 64 hours at $100 per).

Math - Part time

Just because you have a day job or a working spouse (or you're a trust-fund baby) doesn't mean that you should LEAVE MONEY ON THE TABLE.

Now, you have legitimately lesser expenses. You probably haven't invested as much as Pro "A", and you probably don't have some of the other expenses he has. You may be able to deliver as good a job as your pro competition (or you may not) at a lower price. Or maybe you're a real hot-shot - if so charge more!

But DON'T LEAVE MONEY ON THE TABLE. You probably don't have to bid that full day job at $750. But for crying out loud, don't bid it at $250! Don't leave $500 on the table. YOU ARE DESTROYING THE MARKET. If you're any good you can bid $600 and still get the job.

Destroying the Market vs. Disrupting the Market

Good competition is healthy. It is an important part of the making of a market. Full time pros have advantages over part-timers and vice versa.

Disrupters have been all the rage lately - Uber, AirBnB, SpaceX to name a few. They're finding opportunities in established markets and they change everything. If they aren't profitable, or if their business plan fizzles, they'll be gone.

Market destroyers, however, do real financial and moral damage. The race to the bottom that starts with "But I can do it cheaper" can be fatal to good creative people trying to make an honest living. If you want to read about a recent spectacular failure that cost investors billions and caused real human jeopardy, search Lizzie Holmes and Theranos.

Evaluate your self-image, respect that guy in the mirror, and do work of which you'll be proud. Get paid a fair amount for your work. AND DON'T LEAVE MONEY ON THE TABLE.

This is an addendum to the OP, but I didn't know if it would show up as new if I just added and edited. I'm a big-time fan of reading for pleasure as well as instruction. Here are some suggestions for expanding your creativity and perspective.

Books that have helped me:

Think and Grow Rich, Napoleon Hill
Originally published 1937. Quaint and old-fashioned prose, but common-sense advice mixed in with some history most people don't know.

How To Master The Art of Selling, Tom Hopkins.
People make fabulous livings doing nothing but selling, but if you want to be successful in your own business, you need to become a great salesman.

The Seven Habits of Highly Effective People, Steven Covey. This is a great tool which can help one proceed in business directed by a moral compass. Covey was Mormon, but this is not a religious tome. It's very human approach to living your life. BTW, his follow up The 8th Habit is worth the read as well.

Atlas Shrugged, Ayn Rand.
This is a long slog, but I've read it three times. It's a 50 year-old economics lesson and the perfect motivational tool for anyone in business.