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Thread: Lets talk money!

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Matthew Rogers
[360 Precision]

Posts: 287
Location: Oxford, United Kingdom
Registered: 16 Jun 2005
Re: Lets talk money!
Posted: 20 Oct 2010 at 18:32 GMT
Not to be rude but if you need to ask strangers how to price your services then you might consider taking a business course.

If you've created a proper business plan then you know exactly what you need to break even. Once you have your break even you can start to work out your hourly rate etc.

This is probably the best book on business plans I've read:

www.amazon.co.uk/Definitive-Business-Plan-Intelli...

If you follow this book to the letter you will answer your own questions.

So in reality your situation is unique to you. Once you've determined your costs and outgoings its up to you to create a marketing plan to sustain the costs of your products and services.

If it honestly takes someone £200 worth of time to create ONE panorama then they really need to take a look at their workflow.

Matthew Rogers
www.360precision.com
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Rudge

Posts: 29
Location: Windsor, United Kingdom
Registered: 8 Sep 2010
Re: Lets talk money!
Posted: 20 Oct 2010 at 20:50 GMT
Thanks Matthew, I will look out for this book, sounds good.

Re: Taking a business course I think we can all learn something from each other?
You may be able to learn something from me as I sold my Knightsbridge photographic studio last year which had a £1m T/O for the last 5 years, so I guess I have picked up one or two things along the way you could say about business, you running any business courses?

One needs to understand the market in which they operate its called market research, what others charge & what the market is happy to pay. You can however charge the way you are suggesting but it's difficult to know if you are competitive?
What do you charge my friend?
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jimmyd

Posts: 184
Location: United States
Registered: 6 Nov 2004
Re: Lets talk money!
Posted: 20 Oct 2010 at 22:40 GMT

Matthew Rogers said:

If it honestly takes someone £200 worth of time to create ONE panorama then they really need to take a look at their workflow.

Matthew Rogers
www.360precision.com


No, what you need to look at is the VALUE to which said panos are worth to the business to which they are being sold!

I am perfectly understanding that a small Mom and Pop shop or low end Realtor will not use my service as to these groups it appears to be too costly. However, Event locales doing $40,000 weddings most assuredly would be willing to pay $200/pano, or $1500 - $2000 for a web tool that helps drive interest online. Their investment vs return is much better as also is their ability to pay a higher premium.

Matt, you sell a product you can hold in your hand, made of raw material. The creation of which can be broken down into hours, workflow, costs, etc. Virtual Tour providers offer a service. If done properly said tour can act as a sales accelerator for a company trying to get more out of their online marketing dollar. 'Work flow' is just one variable in the equation.

On a side note, questioning a member's 'business sense' because he asked a relevant question on a friendly forum is bad form. I am not one to contribute to the Matt Rogers Hate Club, but I must say that statements like that will do you little help in the area of 'support' on this forum. Not that you would care of course.
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Matthew Rogers
[360 Precision]

Posts: 287
Location: Oxford, United Kingdom
Registered: 16 Jun 2005
Re: Lets talk money!
Posted: 20 Oct 2010 at 23:24 GMT
For virtual tours I've charged anywhere from $100 (2004) up-to $175,000 (1997) for a full interactive CD-ROM with multi-lingual voice overs etc. These prices also reflect the production time, employee numbers etc.

I've always based my prices on cost + a percentage mark-up. I never have and will never subscribe to the unethical practice of charging based on what I think a product is worth to a certain customer. Nor would I ever employ a company if I thought they were charging me on this basis.

A product/service has a worth based on the production cost plus profit to keep a company running and the employees happy, anything more is simple greed.

This is the main reason why I detest stock photo libraries. Why does an image cost more simply because the resolution is higher or I'm using it in a larger brochure run ? What a crock of crap ! If people are stupid enough to pay for products and services based on this pricing structure than more fool them.

It's one on the main reasons I got out of the real estate industry. Charging a percentage of the sale price is nothing short of criminal.
Do you think it costs 10 times more to sell a £2m apartment in Soho compared to a £200k bungalow in Reading, of course not.

Just look at the prices for our products, I've had customers tell us that the Absolute has saved them tens of thousands of pounds, that's awesome but do you honestly think that entitles me to a cut ? We recently had a customer complete a multi-million pound contract shooting over 2500 hotels which without the Absolute wouldn’t have been possible. You don't see me sending them a bill or increased our prices.

The price can also come down to the personality of the person selling. I have some customers that would very easily win contracts for 10x as much over other customers, purely because they're far more personable. Attributes like this simply cannot be portrayed online.

So whether I tell you I sell fro £95 or £950 is quite irrelevant unless I give you my business plan and lots of other details.

Matt
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Hans Nyberg

Posts: 2874
Location: Denmark
Registered: 28 Aug 2005
Re: Lets talk money!
Posted: 20 Oct 2010 at 23:50 GMT

Matthew Rogers said:

For virtual tours I've charged anywhere from $100 (2004) up-to $175,000 (1997) for a full interactive CD-ROM with multi-lingual voice overs etc. These prices also reflect the production time, employee numbers etc.

I've always based my prices on cost + a percentage mark-up. I never have and will never subscribe to the unethical practice of charging based on what I think a product is worth to a certain customer. Nor would I ever employ a company if I thought they were charging me on this basis.
Matt


Matt
I assume you are not a fan of Scott Highton.
Its the American style, but it hasn't helped them very much in business.

Its a way of billing clients which is very unknown to me, even if as you say stock agencies mostly US ones also used it in Denmark.
I believe the last one died last month and was taken over by the largest Danish agency.

It would be impossible for me to control what clients use the images for.
And for them especially tourist clients it has to be one in all price as they can not ask for permission each time they make a new brochure.

Earlier this year I made around 20 panoramas for a large Art Museum in US
and I had to tell them several times that I did not license the use of them.
They payed for my work and thats it. As long as it was used by them they could use it for Web, books, or whatever as long as they need.

However I learned that in US they pay special taxes of the part which is license. Thats why they wanted me to specify what was work and what was license.

Hans
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Matthew Rogers
[360 Precision]

Posts: 287
Location: Oxford, United Kingdom
Registered: 16 Jun 2005
Re: Lets talk money!
Posted: 20 Oct 2010 at 23:56 GMT
I just wanted to add that the only people I know of that buy images based on a stock library model are always spending OTHER PEOPLES MONEY. I've been involved with dozens of ad agencies for various jobs and they DON'T CARE if the images are priced like this because it's NOT THEIR MONEY.

Matt
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jimmyd

Posts: 184
Location: United States
Registered: 6 Nov 2004
Re: Lets talk money!
Posted: 21 Oct 2010 at 16:33 GMT
Who said anything about charging different prices for the same amount of work? I simply stated that we don't do business with those looking for a lower price fixed solutions. We are a custom provider that does business with organizations that are willing to pay for a higher premium. Is there anything 'unethical' about that?
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iam360Texas

Posts: 327
Location: Fort Worth, Texas, United States
Registered: 12 Jul 2006
Re: Lets talk money!
Posted: 21 Oct 2010 at 18:09 GMT
Different price for same work.... Sure its called supply and demand economics. Question you need to ask yourself is whats it worth to your client. One client the pano work might be worth several hundred thousand dollars to their bottom financial line. How much money is your work going to earn for your client?

It is not about your panoramas. Your panorama images only show your clients products. Products (hotel room, property) that your client needs to sell. Your panorama photography basically are not a physical component of your clients product. Panoramas are just "added value" expenses for your clients products.

Dave still at 360Texas.com
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