3 Pricing Myths that are Ruining your Business

Pricing Methods

3 Pricing Myths that are Ruining your Business

Let’s bust these myths that are keeping you overworked and underpaid!

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Myths that are ruining your business

When I first started as a photographer, I scoured all the pricing guides and education I could find, only to be left disappointed in the sales room. I had been told to price my products a specific way and it just wasn’t working out and I thought I was doing something wrong. Through trial and error, I learned to think the opposite of what all those pricing for photographer guides had taught me and within one month of changing my prices, I started bringing in $4,000 sales from every single client… and I had been a photographer for less than a year! 

So let’s bust these myths that are keeping you overworked and underpaid and talk about the truth of pricing that can finally get you paid! 

MYTH #1:You have to shoot for free or charge crazy low prices when you start your business.

TRUTH #1: Let’s be honest… we’ve all been there. We decided to start a business (whatever the heck we thought that was at the time) and knew we had to charge for our services, but for most of us… we had NO CLUE what that was. And because we were just starting out, we probably picked some LOW numbers based on our inexperience and honestly… fear. 

What your pricing SHOULD be based on is your current financial standing and needs. Your business FUNDS your personal life so your prices for your services and products should allow for that. If you need $3,000 a month to contribute to your family, you need to make sure you can pay at least that to yourself every month, while also still paying for your costs of running a business and those heinous income taxes. If you can’t make your minimum ends meet in the beginning of your business journey, that business isn’t going to last long.

Now I know what you’re thinking, “I’m just now starting out and there’s no way I can charge thousands of dollars for a session!” No one is saying you have to. Instead of shooting 5 – 3 hour sessions at $1,000 each, consider shooting 7 – 90 minute sessions at $750 each. Time is a commodity and you can make it work for you, but make sure that you’re not just giving away the time you could be spending with your loved ones. 

MYTH #2: Price your a la carte products three times the cost of good.

TRUTH #2: How that statement should read is “Price your a la carte products AT LEAST three times the cost of good.” It’s meant to be a base measurement, but somewhere along the way, it became Bible in our industry. I remember reading it in a pricing guide a long time ago and making that “Huh?” face because it just didn’t add up. If we all used the same lab and offered the same products, using this rule as an absolute would make us all priced the same! Yes, our prices should be at least the 3x rule, but we shouldn’t stop there. 

The 3x rule was originally created so that the first portion would pay for the cost of good itself, with two thirds left over as your profit. It also ensured that if your first product order came back with a mistake or a design issue, you still had two thirds of profit to order a second re-order, leaving you with one third profit in that event of need to order two products. Again, this is a solid starting point… not the end goal.

And now, I must ask you a question… is your client paying money to you for the material used in the product (linen canvas, matboard, photographic paper) or the image you photographed that is printed on that material? Of course, the answer is your stunning artwork. This is where the range of product market value takes place. Some photographers can charge $20,000 for a large canvas. Others charge $1,000 for the same. This is the beauty of pricing beyond the 3x rule and working with a profit margin that works for you (and your target market, of course). The more experience, business understanding, and target market demand you and your brand gains, the higher profit margins you can charge on not only your products, but services as well.

MYTH #3: Offer 3 product collections so your client will likely choose the middle offer.

TRUTH #3: Again, I don’t know when this became Bible in our industry, but I wish it had never been taught. Why would anyone shoot for mediocrity when it comes to client sales? Why drive a client to purchase the middle collection when you can use sales psychology to sell the top collection every time? 

I have been holding ordering sessions for over 10 years now and my average sale is $5,000 per IPS (in person sale) client. How is that possible? Because I built my collections to be rooted in psychologically motivating factors that drive a client to want only the TOP collection I offer… not the middle collection! This includes offering a total of FOUR collections (not three) and using forced dichotomies to drive wedges between the collections by understanding what my average clients consider premium (most valuable) products and positioning them to make the top collection the most desirable. 

In addition to creating collections with these value structures in mind, having an IPS system also based in consumer psychology bolsters the likelihood that your clients will go for that top collection every single time. 

Are you seeing a pattern here? Pricing yourself for maximum profit takes an in-depth look at your personal and business finances while also understanding what makes clients want to spend the most with you. It’s a beautiful (to me at least) dance between math and psychology and how they can be leveraged together to gain maximum income. I know it takes extra work, but it’s so worth it, I promise! 

Want a better understanding of how your personal finances and business finances can work together so you can actually get paid?!? Download our FREE Pricing Guide with over 25 pages of step by step details including formulas to help you figure out your personal and business expenses, tax estimates and deductions, minimum order requirements, a la carte profits, and so much more! 

Pricing myths that could be ruining your business

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