We have all been there. When starting to work in Photoshop, is easy to fall in love with it that all you want to do is learn new techniques, stay ahead of trends, practice and just retouch, retouch, retouch.

Even when people want to pay you, the idea of someone, actually, trusting you with their images is overwhelming. Building up a portfolio is a full time job and usually pricing your services, or anything business related, doesn’t seem as important.

Deciding what to charge is difficult, especially when one is just starting.

The first thing we need to establish is “service differentiation”

How do you differentiate your services from that of the competition? The key to competitive success may lie in adding valued services and improving their quality.

I’m going to borrow a marketing concept proposed by Edward Chamberlin in his 1933 Theory of Monopolistic Competition – Product Differentiation – and try to go from there.

In Marketing, there are 5 ways of differentiation.

It’s my personal opinion that most people in the retouching business used to rely on #3. It used to work but now, information is available everywhere and hence customers are more educated.

#2 works for product differentiation and it doesn’t apply to a service all that much

#1, #4 and #5 – Could give you a piece of the market – Which one you chose will depend on where you’re from.

#4 and #5 works better for people in third world countries who can hire a full 20 people team and be available 24/7 for bulk work – Very cheap.

We are left with #1. Quality

If you are freelancer than you need to calibrate your brain to think like one. You are not only offering retouching, you are offering consultation, and you need to market and sell yourself as someone who has not only the technical skills but knowledge about the business, target and general context.

Quality is not just about the retouching itself but also about you as a service provider and the added value of service that you have: Honesty/being real in today industry is a commodity, trust, people skills, meeting deadlines, doing always a bit more than you’re asked to. Offering feedback and advice to your clients.

I always say to potential clients, they are not only getting a retoucher, but someone with input– whether they want it or not.

Note: You could always go for Price or Availability and outsource – But remember the problem with trying to differentiate yourself through price is that any idiot can match you in price. If you go low they go lower and if they can pull off better profit at the end because they live in a cheaper country or they have deeper pockets to begin with, you are going to go bankrupt very soon.

Once you have determined how you plan to differentiate yourself from your competitors you
need to evaluate yourself as a business.

Something that can help you with that is doing A SWOT analysis:

Image via Wikipedia

Strengths: Anything you possess that can give you an advantage over others in the industry. From Location, to traveling flexibility, to a secondary job to support your testing, etc.

Weaknesses: are characteristics that place you at a disadvantage relative to others. Again, from Location to not having enough experience, to being colorblind

Opportunities: external chances to make greater sales or profits in the environment. Things like Loans, an opening in the market, a new niche, etc

Threats: external elements in the environment that could cause trouble for the business. Too much competition, globalization, etc

Write it down, make a list, and be honest.

Once you have established where you stand and how you will differentiate yourself you can start thinking about pricing.

Easy Math

When you’re thinking of “freelance” pricing for what ever (and I mean what ever).

Think about the monthly/year salary you’d get at an agency/office/studio/etc. Be realistic about your expertise and level/quality of work – If you’re a junior go look at job openings to see what they pay for an “intern” for a “junior” for a “senior”

Once you have your “realistic” monthly number – divide it till you have the HOURLY RATE – To that number add a 50% more (because who ever hiring you on a freelance basis isn’t paying your health insurance, computer upgrades, internet access, etc) And IDEALLY that’s your rate.

Note: This means that if you think you’re in the position to be an unpaid intern, because you still need to gain experience, you would be making 0 a month, double that you get 0 – Then you shouldn’t be thinking about pricing your services as much as you should be thinking about testing to improve your portfolio.

That’s how I did it and then it gets easier: If you’re getting too much work, then you need to increase your prices, if you’re not getting enough work then you need to go lower. Marketing 101

Other factors to consider when pricing yourself

“Pricing is both an art and a science.” ~Toftoy
Pricing a service is more subjective than pricing a product, so it can get complicated

Cost/Profit:
Take into account what you’ve invested (education, hardware, software) as well as your month/year expenses – make sure you divide it in hours and be realistic. You need to AT LEAST cover what you spend, but take into account that in order to make it in a creative business, you will eat artistic integrity a few months of the first year (I guarantee it).

Competitors’ pricing:
Check out bids and companies, but be fair with yourself and others, don’t compare yourself to
people in a different level. Fit yourself in your own market.

Offer/Demand:
This is a very important aspect of pricing and I’m going to give you my honest opinion. Retouching/Photography is a very competitive business and I think trying to compete in a low
price market is not smart, to little demand, too much offer. Think about where the real demand is and what you’re willing to offer as well as who else is offering the same as you at that particular time.

Skills/Experience:
This is where the money is. Whatever your rate, expect it to be commensurate with your skill level of expertise. Don’t expect to be making as much money as someone who’s been in the industry for ten years producing solid work.

Perceived value to the customer:
This is where a lot of the subjectivity comes in when setting a price for a service. My advice is to stay away from the customers who don’t really see the value of what you offer. Don’t try to convince them, go with the ones who do. Separate the suspects from the prospects.

Hourly or Flat Fee?
It doesn’t really matter how you present the quote to your client/prospective client as long as you’re realistic with the variables: time it will take you to finish the project, difficulty, extra costs such as buying stock, etc

Rounds of Corrections:
This is a very personal decision, but I thought I’d include my perspective on this mater. My belief is that the client gets as many corrections as they need until they are satisfied. I stand by my quality because that’s my differentiation.

Pricing and Briefing:
Last thing but not least, one of the most important parts of quoting is getting a as clear and detailed as possible brief from the client. Having them draw on the images and ideally having everything they want on writing to avoid misunderstandings.

Something I always include in my own quotes: “Everything not included on the original brief will be charged by the hour“. This makes the previous point (rounds of corrections) a lot fairer for everyone involved.

Natalia Taffarel will be teaching a retouching workshop July 9th & 10th in New York City with Jeffrey Scott Fogarty.  For more information, visit PassionofPhotography.com.