The Business of Selling Digital Photos

The question I get asked most often is how to price digital photos. This is really a simple answer once you take a bird’s eye view of your photography business. First free yourself from thinking about prints and packages of prints. We will cover this a bit later, but for now focus on your customer. Regardless of the products offered, what is your current or desired average sale per customer? This can be calculated by taking your total revenue for a particular period of time and dividing by the total number of customers and/or sittings for that same period of time. Industry data suggests that for sports and event photographers this number averages between $20-$35. For most portrait and wedding photographers, this number is $120-$150. Remember these are averages and may not accurately reflect your photography business. Plug in your own numbers based on your actual sales and customer data to provide you the most accurate measurement. Once you have your average sales per customer then take a look at what products are you selling to get you there. Prints, services, frames, etc. should all be included. What item do you sell the most of? Typically for today’s photographer the answer would be prints. Today prints represent the majority of the revenue of a photographer and also provides a healthy profit for the business, however that is quickly changing.

Let’s do the calculation together. Let’s say you are a sports and event photographer and your average sales per customer is $25 consisting of approximately two 5x7 prints. In order to match that in a digital world would require that each file be sold for $12.50 each. Yes, you will lose the residual revenue of the future of that image, however that typically is less than 1% of the annual sales of a professional photographer. In exchange for losing the unlikely residual print revenue for that image, you also decreased your costs and hassles of not having to print those images. This reduces your cost of goods sold from a typical 35% to less than 10%, saving you over $6 on this one order alone. Not a bad trade-off for hoping to get twenty-five cents in the future. As my grandmother always said, a bird in the hand is better than two in the bush.

In addition your customer’s interest in buying the digital file is increasing by the day, while their value of a physical print is decreasing. They are not saying that they do not want to print, what they are saying is they do not want to be forced to purchase a print as part of a professional photography session. By attaching a professional service such as photography with a commodity that is quickly losing value, creates a recipe for a fledgling business down the road. The consumer views the print just as another product in the long list of photo products that now include photo books, digital picture frames, mouse pads and pajamas. At a recent industry conference held on imaging, it was stated that over 4,000 products can now be produced with your photo. Many of these may not seem credible, however to your customer being able to choose to print when and where they want is of increasing value. Take advantage of this trend and price your digital files to not only replace your current offerings, but lower your costs of doing business and leaving more profits in the bank.

When I meet a photographer who is beginning to sell digital files, I always ask them to describe how they price and market them to their customer. Over 80% of the time, I get the response that they sell the digital file only if the customer buys a print first. My response is always the same. I tell them that you have got it backwards. You are forcing your valuable customer to buy something they may not want, and in the process, you are discounting the digital file as an afterthought. This would be like me going into the grocery store for a jar of peanut butter and being forced to purchase a loaf of bread first. I may want the bread in the future to make a peanut butter sandwich; however I may have other pressing reasons for buying just the peanut butter today. Always offer what is most valuable to your customer and you will maximize the sale. Start with selling the digital file and then offer a discount on a print. This aligns the transaction with your new digital customer’s expectations and will result in an easy and profitable sale. Never discount or subordinate the product with the greatest value to your customer.

Don’t be afraid to change your business model to reflect the value most prized by your customer. Swimming downstream is always easier than swimming against the current.