Are albums really profitable?
Imagine upping your profits from £39 per hour to £50, £60, £70 or wherever your ambition and goals take you!
There is a misconception that selling albums takes time and results in minimal profit, we think this stems from the psychological effect of relativity and here's why...
Dan Ariely talks about relativity in his book Predictably Irrational. He defines the effect as "the tendency to estimate the value of things according to how they compare to other items". For example compare the money you make from a £1500 wedding service with selling a product for £500. At a glance the wedding looks way more profitable, but is it?
Let’s take a look at the numbers, which are based on service-only costs (no product).
We asked a group of wedding photographers what they charge for a full day wedding, the average was £1827, the average amount of time spent on a wedding was 33 hours. So quick maths would give an hourly rate of £56 an hour.
However, there are costs to running your business. The average from our group of photographers was that 30-35% profits went to the cost of running your business. So, if we work on the basis that 30% of the £1827 wedding fee goes to running your business, that leaves you with £1279, it still takes 33 hours so, your hourly rate is actually £39 an hour after costs. Clearly £1279 is a decent amount of cash but looking at the hourly rate could you be more profitable?
So, how can you be more profitable?
What if you were to sell an album in addition to your wedding service? Our research shows that designing and ordering in as little as 1 hour is possible using our free design service. You simply choose the images and send them to us. But let’s call it 2 hours to be safe.
An album’s average purchase price is approximately £250, including shipping (based on UK). Most photographers will apply a minimum of x2 markup, thus selling for £500. Hours worked = 2 resulting in an hourly rate of £125. Nice.
In this case, although you may only make £250 compared to £1279, the hourly rate is higher and more profitable. Think about the potential for higher profits from all of your weddings/shoots. By selling as much product as possible, you can increase your hourly rate for the year. Imagine upping your profits from £39 per hour to £50, £60, £70 or wherever your ambition and goals take you!
As mentioned the numbers are an average from a group of professional photographers so, we encourage you to calculate your costs, work out your own hourly rates and set goals that are right for you and your business.