Pricing & Negotiating: Interiors For Residential Appliance Company

by Jess Dudley, Wonderful Machine

Shoot Concept – Interior Architectural and Detail images of installed small residential appliances

Licensing – US Advertising and Collateral Use of up to 24 images in perpetuity

Location – Two residential properties

Shoot Days – One

Photographer – Lifestyle, Architectural and Home & Garden Specialist

Agency – N/A

Client – A small residential appliance company – a household name to those “in the know”

Here is the estimate:

pricing and negotiating, photographer estimates, wonderful machine

Intro: Last year I worked with one of our Midwest-based photographers to put together an estimate for a small residential appliance company. The shoot was fairly straightforward, without much in the way of production prep on the photographer’s side. The photographer was to shoot architectural interior and detail images of the appliances in use in two nearby homes. The client would be providing homes with the appliances already installed.  After reviewing all of the details and correspondence and researching the brand a bit (I wasn’t familiar with the product and wanted to get a better sense of the size of the company and their product line), I connected with the client to discuss the project and sort out licensing and our approach.

After confirming that the photographer would be shooting two scenarios at each of the homes, and that we’d be shooting 2-3 architectural/wide shots and 3-4 detail/tight shots in each scenario, we dove into the licensing. The locations, product, installations, props and props styling would be provided by the client, which simplified things for us considerably on the production front.

Creative/Licensing: Initially, the client requested “unlimited use of all images captured.”  Although you won’t always like the response, you need to challenge a client when they request, all images, a buyout or unlimited use. These are all vague terms we try to avoid (or elaborate on at a minimum). In this case, I needed to clarify if the client truly wanted the license to use all of the images captured. I also wanted to pin down their intended use. After a little push, the client was willing to limit the licensing to US Advertising and Collateral Use of 24 selects. The duration was still a sticking point, they we still insistent on a perpetual license. We don’t usually press very hard on the duration because there is an inherent shelf life on any given image. The value of a given set of images will taper off over time. The slope of that taper will vary based on the style, styling and subject matter. So even though the licensing was drastically limited from the original request, the client would still be able to use the 24 images in a manner that felt unlimited to them, so they were content with the restrictions.

After developing a firm understanding of the project and a decent rapport with the client, I pressed for some insight into the budget. About half the time I ask about the budget, I’ll get a valuable response. The other half of the time the budget either hasn’t been set, or the client is unwilling to reveal it for some other reason (triple bid, etc.). In those cases, you can press a bit further and find out if they’ve shot anything similar in the past, and if so, what they spent. You’ll also want to know who else is bidding if they’re willing to share that info with you in order to alter your approach to the estimate. In this case, the client was forthcoming, and had a firm 10k budget. At first glance, considering the usage, it seemed low, but I took the news in stride and set about drafting the estimate.

Because the budget was tight, I decided to approach the estimate differently. Typically, I’ll determine the creative/licensing fee, then build out the production estimate. Since we had a tight budget to begin with for this project, I opted to work backwards and price out the production first. With my production expenses dialed in, I was able to see that I had about 6000.00 left in the budget for fees. This is quite a bit lower than I would like to see for this usage. However, after considering the likelihood of any major consumer advertising (minimal), the straight forward nature of the production, the photographer’s level of experience (pretty fresh) and the size and prominence of the client (all of which apply/allow for downward pressure on the fee and/or value) I felt it was a reasonable fee. I calculated the fees on some of our pricing resources as well: Blinkbid’s Bid Consultant – 5,030.00/image for the first year, Fotoquote – 21,454.00/image for the first year and Corbis – 12,000.00/image for the first year. Though definitely valuable tools, these resources assume that each of the images will be used in every conceivable manner within the prescribed parameters, so you have to take their suggestions with a grain of salt.

Tech/Scout Day: We estimated a half day of tech/scouting time for the photographer and client to walk through the locations to nail down the shot list and angles in advance of the shoot. This would be crucial since the shoot day schedule would be somewhat ambitious. It would also allow the photographer choose a staging area and determine which gear to bring and which to leave at home.

Assistant: The photographer generally shoots without much grip or supplemental lighting so he was comfortable including just one assistant. We opted not to include a second assistant, instead relying on the tech to be an extra set of hands to load in/out, etc.

Digital Tech: The digital tech would help to manage the flow of file intake and display for client approval on set. Because it takes much longer to dial in and bracket an architectural shot, the selection process happens on set, during the shoot, in realtime (the client approves the shot composition, the photographer covers exposure and focus and processes those approved shots in post for final delivery). In the case, a tech essentially eliminates the need for a “shoot processed for client review” fee.

Photo Equipment and Workstation: This covered the one day rental costs for a laptop workstation, two DSLR bodies, a variety of lenses, grip equipment and lighting (some of which the photographer owned, but planned to rent to the production at  the market rate).

Images Processed for Reproduction: 50.00/image is in the lower end for architectural selects processing but the photographer was open to reducing the rate a bit to hit the client’s budget. Normally, I’d like to see that rate closer to 75.00-200.00/image for architectural processing, depending on the shoot.

Miles, Expendables, FTP, COI and Misc: This covered the basic out-of-pocket expenses the photographer would accrue between mileage, FTP cots, Certificate of Insurance (ranging from free to 50.00/COI depending on your insurance company) and any other miscellaneous expenses that may arise.

Overtime: Because the shoot day was fairly ambitious, I wanted to make sure it was clear to the client that if the time on site exceeded 10 hours, that the crew would bill OT at time and a half.

Housekeeping: For the sake of clarity (read: cover your ass) I made sure to note all of the production elements the client would be providing.

Results, Hindsight and Feedback: The photographer did not get the job. Although it seemed like we had the project locked up, in a excruciatingly frustrating turn of events, another photographer estimating on the project neglected to ferret out the client’s budget and priced the project at less than half of our estimate, all in. The client was eager to work with us, but felt that the difference in quality between the two photographers was negligible while the difference in fees was substantial. It was particularly tough to hear because the budget was borderline unreasonable to begin with. I’m sure there are some who would look at our willingness to work with the budget with a judging eye, but the fact of the matter is that the client had a finite amount of money to spend, we’d limited the licensing as much as we could and the photographer rarely, if ever, shoots five figure budget projects. No matter what, the client could not spend more than 10k. For some, that’s not nearly enough. For those who are willing, but fail to ask the right questions (ie ignoring a client’s budgetary threshold) end up carelessly undervaluing their work, seriously undercutting the market.

Ask the uncomfortable questions. Usually they are only uncomfortable for you.

If you have any questions, or if you need help estimating or producing a project, please give us a call at (610) 260-0200. We’re available to help with any and all pricing and negotiating needs—from small stock sales to big ad campaigns.

Wonderful Machine

There Are 16 Comments On This Article.

  1. This has happened to me multiple times in the past few years. I’ve come up with an initial estimate, drastically adapted it to meet a clients small budget, and still lost out to someone bidding WAY less. I find it hard to understand how they could bid so low as I had pushed the numbers as much as I could to arrive where my bids stood.

    Another note: as much as I LOVE using Blinkbid to assemble estimates and invoice, I’ve rarely found the bid consultant not come up with numbers that are multiple times higher than what I could hope to expect (and I’m not lowballing by any means).

  2. Charles Billings

    Sounds familiar to me, too. I recently bid on a job for an old client. Knowing I was part of a bid process, I submitted a bid that was exactly what I had been paid by this same client for a similar job in 2009. The total came to something like $12K. I lost the job to a photog who had bid just over half of what I was asking. I know this because my client called to let me know (against the rules of her company, but we’ve worked together for a long time and she was disappointed that the bean-counters are the ones pulling the strings now.)

  3. It’s crazy what some people will work for these days. I have had multiple problems with underbidding in the past. Thanks for sharing your experience it was a good read.

  4. Saw that one coming… Was actually quite surprised the company had that much to play with in the first place. I often ask about projected budgets and other similar questions as you did and often find small company = smaller budget and typically no clue about usage….

  5. I think WM does a great job overall, but this was kind of clueless. 24 finished photos in 10 hours, 2 locations is crazy. Assuming even minimal setup, strike, travel, and setup times, and excluding lunch, we’re talking about a finished photo every 15 or 20 minutes, at best. What the hell was the Digitech supposed to be doing? Even assuming the photographer was doing HDR, that’s not enough time to really do much more than crank the brackets through whatever digital meatgrinder they were using. This was a great day for some real estate photographer who’s accustomed to minimal lighting, zero styling, and a breakneck pace. The photo quality wouldn’t be there, but the client may not have cared. But WM should have been able to tell what the quality expectations were, based on the pace the client thought was reasonable.

    • That is a great point.. most likely went to a local real estate guy. I live in a fairly small market, (250K population), and this type of shoot is pretty common. The area is mainly dominated by wedding photographers who have no idea how to bid a commercial shoot, and clients who dont understand usage in any capacity… its not even talked about on a bid. A fellow commercial photog in the area did a 3 day real estate shoot for a local real estate agency, and did nearly 60 homes in that time. Knowing the rates around here I am sure the whole thing didn’t hit 5 digits. The really sad thing is that there are some major (international) companies in the area that get some heavy duty advertising for super low rates.

  6. Unfortunately, I fear we’ve come to a point in our industry where the writing is on the wall for the whole usage pricing model. Many corporations and even some agencies now realize that the market is flooded with talented photographers and have therefore made the usage negotiation phase of bidding a job a non-starter. I am getting more and more calls that begin with the caveat that I need to be “all in” before even continuing the conversation. Big agencies still play by the old rules, but there are signs of erosion there as well. There is always someone willing to do the job cheaper, and technology now exists that can correct the mistakes or shortcomings of less experienced shooters. What was once a pretty special profession that allowed for a unique way of making a living is being systematically disassembled by those holding the purse strings. As Jess mentioned, the same pressure applies to rates. I wish it weren’t true, but professional photographers (the ones who actually need to purchase health insurance, support a family, save for retirement, etc.) must find a way to adapt or go the way of all those guys who couldn’t wrap their heads around the concept of shooting digital. Remember them? Me neither. Wish I know the answer… let me know if you do.

  7. scott Rex Ely

    It always cracks me up at the entitlement mentality for pricing people can have. Sure everyone should be asking what the prevailing rate is.
    But the prevailing rate in reality is governed by what the job actually paid, is it not?
    It’s a buyer’s market folks. Put in a bid that you need to meet your efforts and overhead and let the dice roll. Don’t want to slash your profit then don’t. I’ve learned there are a million ways people can skin a cat and they will try them all if their ego and ambition get in the way. If the difference between the two photographers was negligible to the buyer then doesn’t that say something about what kind of job this was. If they could get someone to shoot it cheaper and did is that not the reality? Why offer the client tethered views?.Shoot it on a card with an intern shlepping the gear and do it for 3/4 of the optimum price and still beat out the low baller.
    Cut the service and some comfort not the fee.
    If it was such an ambitious schedule then treat it like one. Sorry, for that many shots we have to do it on the fly and that means service suffers not my compensation for my talent that can make this schedule happen.
    Just my 2 cents, but I’ve heard this story waaaay too many times and it doesn’t seem like people are willing to adapt, which just might be accepting the fact that it’s financially untenable to maintain a business in this manner.

    • Scott – I think you’re exactly right. There are many different kinds of jobs and clients. It’s too easy to cut off your nose to spite your face. In the end, we all want to work and have to look hard at our overheads and fees and adjust accordingly.

  8. Scott – just to make a point, I find it a bit concerning that part of your solution is to have an (assuming) unpaid intern haul your gear instead of a paid and knowledgeable assistant. $350 is the going rate for a commercial job in a non-major metro area, which, as a cost overall, should not make or break who wins the bid.

    We should be careful as an industry not to cannibalize each other; producers, scouts, stylists, assistants. techs, retouchers, ect…. having a pool of good crew (people) available is absolutely paramount; without a talented crew plus a talented photographer there would be no good work being produced.

    Someone made the comment that it was an aggressive shoot day – so having a good crew in place could potentially make that expectation more feasible. I am pretty confident that Jess thought this estimate through well. He mentioned that he wisely put production first, and then the fee second, which make sense when faced with budgets that are tight.

    • scott rex Ely

      Caleb, all of your points are valid. However, I used those examples of how to skin the cat differently to reflect how some people might justify solving the problem recognizing this job may not be anything more than paying the next month’s bills. Your points are valid and ideal, that’s fantastic and admirable for maintaing quality prices for a hard day’s work, but when we head down the slippery slope of diminishing creative fees and how to get more bucks back on our plate, discounts are inevitable. Again it’s a buyer’s market and people who are savvy shoppers know where to look for savings and still maintain value.Why can’t we be the ones who offer the same canned product, like pumpkin pie filling or tuna and charge the same for less than we used to serve? It’s got to be discounted some place and then return those losses to the end consumer.I just suggested a way to consider cutting expenses and unfortunately support labor might be the victim.

  9. $6000 ÷ 24 = $250 per photo, with full licensing. This is the same fee Hot Shots quoted on their Workbook page in 1989 for product shots on white seamless in their Chicago studio. Including an assistant & hot coffee and a 3-shot bracket of film. But no scan, color balancing or retouching.

    When working this kind of job, it’s imperative that the client who’s responsible on the shoot know that they have to quickly approve every shot prior to moving on to the next. They must sign off on each image within minutes of capture. If they know/trust the photographer, competent images can be attained, but not exceptional images.

    Caleb: “We should be careful as an industry not to cannibalize each other; producers, scouts, stylists, assistants. techs, retouchers, etc. …having a pool of good crew (people) available is absolutely paramount; without a talented crew plus a talented photographer there would be no good work being produced.”

    If the selection of photographer is not based on the look of the final image, then the job can be awarded to just about anyone with a camera. Accurate focus and properly exposed images are now the domain of anyone with a cell phone. The delivered images must have value beyond this criteria for the successful photographer.

    • CB, Agreed – I was focusing on the one aspect of shorting the crew to the original post of Scott’s. I did mention that part of the equation (and really the most important part) is having a talented photographer as well. Your point is spot on and valid.

      I think we both understand that it is simply not good enough to just make technicaly properly exposed photos anymore. Digital changed all that and the barrier to entry for professional photography has become much easier.

      As for the debate on fees and such in these kind of low budget situations, it boils down to the perception of value the client and photographer have in relationship to each other and who is willing to compromise more. Most of the time with clients like this one they will just find someone who they perceive as good enough.

      I would be very curious to see how the shoot went with the photographer who came in at half the budget. If they were successful in all aspects of time and deliverables, hats off to them if they were – but I would bet that something had to give.

  10. The problem with photographers/producers is that they hide their fee structure like it’s some sort of magical ether to their real business. As if showing the world what you charge is going to somehow create a benchmark at which a client can talk you down from and piers can use as a way to effect your business negatively.

    If there were more resources that were front facing on say ALL PRO Photographers websites you all wouldn’t be getting under bid, because the standard rates would be established.

    I know this to be true because I am a web developer trying to figure our realistic rates and came to this article by way of Google.

    P.S. Instagram is the most effective photo delivery mechanism I know of…embrace it in a professional way!

  11. 2-3 wide shots per home, 3-4 detail shots per home, 2 homes: this would be 10 to 14 shots. What kind of shots where the other 10 to 14?

    How many setups would there be needed? It probably would be one kitchen per building, and one bathroom.

    Did I miss something here (as I don’t shoot interiors), or was the description not too detailed?