Low Bidders Putting Pros Out of Business !

Discussion in 'Business of Photography' started by bill_lyons|1, Feb 10, 2014.

  1. I am sure you have all heard a story similar to mine many times in recent years.
    A few weeks ago I was called by a previous client, a large US engineering firm listed on
    the NYSE, to photograph their installation at a $ 20 billion industrial complex. The client told me they loved the work I did for them last year and wanted me to shoot another job for their annual report. I sent my estimate and received a call in which I was informed that although
    they really loved my work , they wanted a roughly 20% reduction on my estimate and also required that I shoot video as well as stills for the same reduced price! I agreed, I am not proud to say. I have a son in college and have heard too many stories about fellow pros who have been under bid by newcomers. In addition to the above, I had to borrow a friend's DSLR for the video shoot and ended up with a $500 repair bill for his camera for a fault that came up while I was using it.
    What would you tell this client when sending your invoice, other than the obvious fact that many
    pros like ourselves have or will go out of business due to the whittling down of our fair fees ?
     
  2. "What would you tell this client when sending your invoice, other than the obvious fact that many pros like ourselves have or will go out of business due to the whittling down of our fair fees ?"
    Corporations are in a constant struggle to sensitize their customers about the quality and value they offer. This type of advertising and marketing effort can be costly, but they build it into their operating budget because that's what it takes to do business.
    The little guy is no exception. It would seem rather naive to believe that quality and value is so evident that it should speaks for and sell itself, that it almost borders insult to have to justify it to dumb clients. Well, anyone thinking that way will do so at their own peril.
    Here's an example of how a high end bag maker combats low cost knockoffs. It's a small business but the owner takes nothing for granted, and with a little ingenuity and creativity, he's turning the tide rather than sit passively waiting for miracles:
    http://www.youtube.com/watch?v=a11wlngpuSY
     
  3. Michael:
    Excellent post and link! One of our most important jobs as commercial photographers is to demonstrate why we're worth the money. I wish I could do it as well as the guy in the video.
     
  4. Video was hilarious. Best line. "You can nickel plate your crack pipe." Too funny. But it works, because now I want to check out his merchandise. They have a 100 year warranty too.
     
  5. I agree that you have to continually remind your clients (and prospective clients) what it is that they're really buying. Experience, insight, some worldliness - these are things that most newbies simply can't bring to the table regardless of the price involved. I have a client who really doesn't much care if it's $10/hour or $200/hour, what he values most are the number of hours in his day, and that we get the work done burning up as few of them as possible. He can't conceive of a low bid from somebody else that would make it worth his time to have to break in a new person and get them to know his business, his products, and him.

    But I still feel the need to keep him well armed with the information that allows him to be confident that he's got the right guy doing the work.

    Happily, I had a "will you take me back?" experience with an older client the other day. They were wooed away by the promise of cheaper services from a start-up. They spent a year pulling their hair out trying to make those "savings" worth all the headaches and under-achievement, and have asked if we can pick back up where we left off a year ago. I said sure, but my rates have gone up (we'd been doing business for years before that, and I'd had him locked in at a too-generous rate from days gone by). He didn't even blink at the newly higher rate, and off we go.

    But I certainly shop around. I have to get some more offset printing done (business cards and some collateral for yet another new LLC I'm spinning up while wearing a specific new hat), and it appears that I don't have much loyalty when it comes to the several large business printing companies that constantly bombard me with competing offers. Those guys are more like commodity vendors, to me, and though I won't use just anybody, I quite honestly just look at whoever's got the really good deal that minute, and that's who gets the order. But I won't look for a cheaper dentist! That guy is amazing.
     
  6. "But it works, because now I want to check out his merchandise."​
    Don't, it's too tempting! He's a helluva salesman, deceptively laid back. I visited the website and watched a few more demo videos and found myself whether I could justify the cost of their "dry bag". I get a lot of use from versatile totes and have nearly worn out my canvas tote. I was about to replace it with a $40 Lowpro Passport Sling. After visiting the Saddleback site I actually found myself trying to justify spending ten times the price for a leather bag.
    Nope, I'm not gonna buy one. But the fact that he had me even thinking about it was a sign of effective marketing.
    Also, the 12 minute video showing some of their operation had me thinking "Oh, man, I bet I could save you some labor costs and reduce your safety risks by using more ergonomically friendly methods." I was actually thinking if I lived in his area I'd swap OSHA compliance advice for a bag! I didn't see any serious safety problems, just a few examples of unnecessary wrist and finger pressure where simple tools would be better. I'm no leather expert but I did have the experience of inspecting some custom leather goods manufacturers that resolved some of their ergonomic problems with cost effective tools in hand assembly.
     
  7. I loved the bag maker's video (not only because I have a sewing machine rotting somewhere). To Bill's big question: I wouldn't tell the customer much with the invoice. At least where I am from there isn't much use in whining about company's neck breaking deals. - I am aware of a lot going broke.. Business related corespondence should be polite and respectful, so stress how you liked working for & with them, apollogize for being unable to carry on at their suggested rates and maybe inquire how to qualify for some careers they are offering, if you are serious about giving up professional photography.
     
  8. david_henderson

    david_henderson www.photography001.com

    Would you do the same job again for the same money? If so don't send a complaining letter because all that means is that you likely won't get the chance. A lot of corporate brochure/report photography these days is hijacked by the agency used to design and artwork the brochure- just send an art director out with a dslr for a nominal add-on cost to the design work, way below what a professional photographer needs to charge.
    Its not terribly unusual for a budget centre within a large corporation to flex its muscles at a supplier's expense. You might wonder whether it's that much different from you shopping around for your equipment? The important thing is whether what you got was sufficient and fair. And just because it isn't the number you first thought of doesn't make it unfair. IMO the time and place to persuade the client to pay more isn't after you've dome the job, in a letter. Its whilst you're discussing the job, and face-to-face.
     
  9. ^ this.
     
  10. Spearhead

    Spearhead Moderator

    At least where I am from there isn't much use in whining about company's neck breaking deals. - I am aware of a lot going broke.. Business related corespondence should be polite and respectful​
    Not only is this true, it doesn't go far enough. When I hire someone, I don't want to hear about the cost of equipment, labor, insurance, etc. That has nothing to do with me. I hire someone to do a job at a price. How they get there is their problem. This is what business is about.
    What I often hear are complaints here that customers don't understand costs. Costs have nothing to do with market price. If the market price is not sufficient to do the job at a reasonable profit, then don't do it.
     
  11. "What would you tell this client when sending your invoice, other than the obvious fact that many pros like ourselves have or will go out of business due to the whittling down of our fair fees ?"​
    I overlooked that part of your original question. I can only answer how I'd respond as a customer under a similar scenario.
    Let's say ?&? has a sale on an item that is so heavily discounted that it's obvious they're making little or no profit. Let's say it's the Nikon V1 and 10-30 VR lens kit I bought from ?&? in late 2012 at the then deeply discounted price. And I know it's an incredible deal and they probably aren't making much money, if any. But I don't feel too bad because I've bought from ?&? before at full price, which I always thought was fair because of their excellent service and overall solid reputation.
    But instead of just sending me what I purchased at the agreed upon price, they also send me a letter implying that I'm a cheap bastard driving them out of business for actually having the audacity to buy the item at the agreed upon price.
    I'd feel pretty weird about that and it might make me reconsider ever buying from them again.
    Obviously that didn't happen and hopefully never would happen. Instead, ?&? continues to compete in every reasonable way without compromising what it does best: offer real products that they actually have in stock, without bait and switch games, solid customer support and an overall positive, reliable shopping experience. And because they do that, I'm willing to pay a little more to buy from them rather than risk hassles with other businesses who specialize in undercutting prices, but who don't have the same solid reputation. And I'll apply the same positive attributes to Questionmarkarama, Amazquestionmark, and KE?, three other businesses I'll deal with for the same reason - real products, no games, fair prices, good customer support...
    ...and...
    ...they don't send me letters making me feel guilty for taking advantage of their lower prices, or because I successfully haggled a deal or trade that seemed more advantageous to me than to them.
    Because that would seem really weird and icky.
    But if I flounced off to another less reputable business and got screwed on the deal, or had to hassle with months of back-and-forth nyah-nyah-nyah to resolve a problem, sure, I'd probably return to ?&?, Ado?, Amaz& or KE? and hope we could resume doing business, no hard feelings. But I'd hope that wouldn't be an issue in the first place.
     
  12. +2 Jeff
     
  13. I feel bad for pro photographers who must make compromises to just get the jobs, but this is the world we're living in right now and it just sucks. My part-time photojournalist job pays $30 an assignment, and when you break it down against the time you put in, before, during, and after, it's below minimum wage. Yea, I get to take a tax deduction on a few things but still, if I didn't love the challenge of photography so much, I would have quit this gig years ago.
    As the economy worsens, businesses and individuals will continue to seek the lowest possible costs for services. Of course the current path this putrid economy is on is unsustainable and likely to correct itself-painfully- but how many young couples with barely two nickels to rub together are getting married and using craigslist photographers to shoot their weddings for $200?
     
  14. it

    it

    If you are a pro and actually losing work to newbies you have to up your skills and/or your clientele.
     
  15. It is essential for us pro shooters to have more than just one talent. These days, at least in the US, economic peril has reduced our income, so building a new talent to supplement our photography seems to be a safeguard. I have done just that. I can work in Supply Chain Mgmt, stock trading or Quality Assurance in addition to shooting. Would I like to do shooting 100%? By all means. It is just not realistic though. Food for thought.
     
  16. The problem you outline has been around for at least 50 years. I know because it happened to me back then and in the years that followed. It's worse today because to some people it seems anyone can take photographs and many people don't know a fine photograph from a sloppy one.
    You have to decide for yourself if working at the lower price with added duties (video) is worth it. I was always the "take it or leave it" type. I did okay with it but I did not get rich either. I generally had an ace in the hole, something I could go back to if my client well dried up.
    Maybe you need to find a video person you can direct. I think I would have said I have a video person and I can throw in that person's work but you will have to up the ante somewhat. It's a people-to-people business not just f 11 and 1/250 sec. It's a witch but it is reality.
     
  17. I would have said yes but would have proposed to spend 40% less time and 40% less photos. And offer them the option to pay more if they want more photos, if the first test was good
     
  18. Low Bidders Putting Pros Out of Business !​
    The implication of your title is that the low bidders are not pros. However, if they're getting the business then they are.
    You might not like the idea of losing business to others who can undercut you but that is what happens in business.
     
  19. I guess "Professionals" are those that embrace EXCUSES - and not solutions. When in reality it couldn't be further from the truth.
    As Steve said: You refer to low-bidders as unprofessional - then you yourself accept the job at a discounted rate.
    Personally I can't wait to send out one of my video shooters the next time a photography gig arises! Preferably one with absolutely ZERO experience!
     
  20. I guess "Professionals" are those that embrace EXCUSES - and not solutions. When in reality it couldn't be further from the truth.
    As Steve said: You refer to low-bidders as unprofessional - then you yourself accept the job at a discounted rate.
    Personally I can't wait to send out one of my video shooters the next time a photography gig arises! Preferably one with absolutely ZERO experience!
     

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