Event host asking for 15% of photo profits.

[ibdnzgr]

I've never had this happen to me before, but after providing both onsite

printing for part of a seasonal event with backdrop formals with online print

ordering for another part of the same event, I considered things a great success

and so did the host. They just contacted me to invite me back for next year's

event which is supposed to be even bigger and better... three sessions instead

of just one long one. They also want me to bring more staff and run two formal

portrait backdrops to cut the lines down. Problem is they are also asking for 15

percent of my photo profits. I am not sure how they plan to get that final

number, but I will have all images posted in my online gallery for ordering. I

definitely want to do this event again, and paying a three-digit "fee" is

something I can do, I just don't feel it is particularly fair on their part.

Considering I get NOTHING from the host to provide the services. I rely entirely

on print orders from the guests and still have to pay my staff (three other

photographers and three support staff).

 

Anybody have experience with a host asking for a cut of the photo profits after

they don't pay anything for your services? NOTE: They charge admission to this

event, so they get plenty in ticket sales. We are talking about 600 to 800 guests.

 

Thanks,

 

 

Ian

[Matt Laur]

Sounds like you need to mention to your customers (the subjects of the photos) that the event organizers are charging you a fee for the images you're selling to them, and that you are forced to pass it along, and more because of the added taxes you'll have to pay on that revenue, and the additional bookeeping. Just level with people, and explain where the extra 20% on top of your cutomary print prices is going.

[savagesax]

Give them 15 percent, raise your prices to balance your costs.

[christopher hartt dallas]

Matt's advice about being upfront with the customers is pretty good, I think. Problem is, the event sponsors who are hosting the event might be irritated. I run into this situation with wedding planners who want a 10-20% finder's fee for weddings they hire me for. I mark up my prices for the percentage (and addl tax) to pay the planners fee - and make it clear to the bride why I am surcharging her. It's rare that the planner books me again. Fortunately, my calendar fills without having to pay sponsors, planners, venue "gratuities", can you say the same? Do you need/want the gig? Publicly announcing their "kickback" from the event will likely ensure that you aren't asked back again - unless your pricing is pretty cheap to begin with IMO.

[bob_osullivan]

It's negotiating. If you are prepared to walk away then tell them you won't pay it. If not, myabe discuss a more reasonable arrangment. When you say they are providing nothing to you, are you considering they own the property, pay for it's ongoing operation? I don't think it's fair either, but there's no rule that business has to be conducted fairly. But 15% is steep. Remember that any commission you pay them would be a cost to you and reduce your profit from a tax perspective.

[ibdnzgr]

I charge $5, $8 and $10 for a 4x6 5x7 and 8x10. This is part of the contract. Remember, they are asking for 15 percent of profits (after expenses) and pretty much taking my word for it. Still comes out to about $400 or so. I just hate this setup. I would much rather they control say, the onsite printing by setting their prices and taking money from guests, pay me my agreed amount and keep the rest as their cut of the proceeds. That or maybe add the onsite print price to the admission and just give everybody an onsite print ticket. This obviously is a very finite amount based on print speed, etc. Online ordering is very open-ended since there is no limit to what people can order if they like an image. Is it common for venues to want as Christopher said a "kickback" or commission or whatever?

[bill_clark___minnetonka_mi]

Could you do the event without them?

 

I wouldn't recommend taking your situation and telling your clients about it. What would

the client think? Whining? In my mind, at least, I would want to solve this on my own with

the event host.

 

Just my take.

 

Hope this helps you.

[Matt Laur]

It doesn't have to be about whining. It's just a "facilities/event surcharge," plain and simple. Because... that what it <i>actually is</i>. Don't even have to talk about it, unless someone wants to know why your prices for that event have gone up by 20% from the previous year. Heck, raise them 25%. Blame it on the very real increase in fuel prices, which impact your transportation to the event, and the delivery of merchandise back to them.

[doug grosjean]

I'm told that this is often done at art shows as well, to cover costs. Organizers get a cut of the sales.

 

My experience is limited, so I'm not passing judgement on whether it's right or wrong or agreeable to you. Just saying it's not unheard of.

[david_schilling___chicago_]

I would suggest that you raise your print prices, the local mall charges more for poor quaility prints with Santa Claus. 15% is a great deal....do the math.

[ronald_moravec1]

It is a tax on a business. You can`t tax a business, so pass it on like every other business does.

 

US governments are still trying to do this. Evidently people never took economics and do not understand the implication of a hidden tax.

 

You say 15% of profits, not revenue. You therefore have to raise prices less than 15% unless you figure 100% profit. in which case I want to partner up with you. Also looks like YOU calculate profit margin. Well I would not advise you to cheat.

 

 

A small sign where the bill is paid explaing that X% of the fee is being returned to the host and that is why you regretfully had to raise prices this year.

[david_schilling___chicago_]

"A small sign where the bill is paid explaing that X% of the fee is being returned to the host and that is why you regretfully had to raise prices this year."-RM

 

I don't see any need to explain your prices, "they are what they are."

[jim_simon6]

Just remember that you have to take into account the extra staff that they are requesting in order to cut down on lines. You may think "Well, an 8x10 costs me $1.50 to produce (ink & paper) and I'm selling it for $8 so I make $6.50 profit for each 8x10". But you have to take into account payroll for yourself, the additional staff to cover the event (per their request), depreciation on equipment, etc, etc.

 

You may already realize all this, but some people think well I already own the camera, lenses, printer, so everything I sell is pure profit. Even if this is your business model, you need to make the event organizer believe that your profit margin is much less. I.E., you're making 50 cents per 8x10 and they're getting 15% of that. That way you keep as much as possible in your pocket and you're still holding up your part of the deal. Just make sure you can justify what you're claiming. Above all, don't short-change yourself.

 

Jim

[Jerry_]

And, if you do take next year's event, be sure to inquire of the event planners their Federal Tax ID #, so you can account for your 15 percent going to them (likely on a Form 1099-Misc.) That should go over really well....

[William Michael]

>>> Problem is they are also asking for 15 percent of my photo profits. <<< (ID)

 

I seek clarification this sentence.

 

If the above sentence is accurate, then, I would jump at it: it is a really cheap site fee, even for a poor paying gig, with a get out of gaol free card if you make a loss.

 

At a suitable time after the event I would advise the convener of my net profit from the job, (after including THEIR 15 % fee as a deduction) and (assuming they are a Registered Business, for tax purposes), I would request they send me a Tax Invoice for that fee, which I would promptly pay.

 

It is likely that you are in the USA where the technical names for the paper work will be different.

 

But the gist of my meaning is it is a really cheap and very safe site fee.

 

As it is based on your `photo profits` we must think bottom line: thus meaning NET profit.

 

I.e. the fee is 15% of the NET profit for all the photo sales FROM THAT JOB; so all costs attributed to that job, are deductions for the exercise of calculating the fee, including the fee itself.

 

(I am assuming that the technical term NET profit has identical CPA meaning for you, as for me.)

 

And it is assumed that the convener provides the necessary paperwork to make that fee a tax deductible business expense, set against that gig in the first place.

 

I would also look at raising my print prices, from last year`s prices, to cover all real increases including your extrapolation of this new expense.

 

WW.

[William Michael]

Upon re reading the thread I see that my question was indeed answered:

 

>>> Remember, they are asking for 15 percent of profits (after expenses) and pretty much taking my word for it. <<<

 

I would jump at the gig.

 

It seems it is a good paying gig for you.

 

They want you to expand you presence, more staff, more overheads, and only asking a 15% site fee on the profit AFTER all wages and expenses.

 

Cheap as chips for a site fee IMO: no flat rate; no hourly rate; no rent; no hire; I would love all fees for itinerate jobs to be 15%, based on Net Profit only.

 

Just factor it into the print prices and get the necessary paperwork to claim the fee as a business expense.

 

The reality is they are in business too and they see you are making money BECAUSE you are using their site, and they want a slice of it, they are trying on a deal and they IMO are playing a closed hand: the real deal will be next year.

 

Next year will reveal either they are a fair dinkum business partner with long term goals or if they are setting you up to screw you.

 

It is next year you need to plan for and the only way you will have the advantage next year is if you have them needing YOU more than the other guy.

 

AND, MOST IMPORTANTLY, you are prepared to walk: but if you choose to play the walk hand make sure you firstly finesse it: but do so very, very late into the negotiations, and give them a little wriggle room to reconsider, before actually walking, and of course ensure you have somewhere to walk.

 

 

WW

[ilkka_nissila]

Can you try to mark quoted text better. Like by italicizing the quoted text and noting who you're quoting. It's hard to read the above commentary.

[William Michael]

>>> Can you try to mark quoted text better. <<< (IN)

 

Sorry you found it hard to read my commentary and thanks for the suggestion.

 

For clarity:

 

Both quotes I used, one in each of my posts, were contained within: >>> <<<.

 

Both were from the OP, Ian Danziger. I identified him in my first post with: (ID)

 

The second I did not identify with (ID), as I thought it was obvious, sorry, it was his quote at: Mar 06, 2008; 05:47 p.m.

 

I have become to use >>> <<< to represent quotes, as the photo.net site only allows italics (and other modifications) by using the HTML which I find time consuming: much easier and quicker to type my commentary at speed, using the simplest device(s) available to me.

 

I have noted other members have commented on this (HTML) feature of Photonet, I have once also: but in the main I have just adapted to it.

 

You are the first to comment upon the difficulty of recognizing >>> <<< identified a quote I was using or that my commentary has been difficult to read.

 

On the other hand, humbly, some have commented upon the articulation, precision and clarity of my writing style.

 

I am sorry for your inconvenience.

 

But taking into account the above reasons and other feedback, at this point I most likely will continue to adapt the simple keyboard I have available to me an continue to focus my attention on the plain word typing: also I will continue to write in the style, using the quotes as above, which is now customary to me, and seems acceptable and understood by the majority.

 

Regards,

 

WW

[david_schilling___chicago_]

Seems to me that WW's writing style pretty much demands that you slow down and concentrate on what he is saying. Being from the other side of the big pond, we are also, indeed "seperated by a common language".

 

;-)

[craig_gillette]

Make sure you have a contract with them that is definitive about what they are providing, what the fee actually is, who it is to be paid to and when, etc.

 

It's not entirely clear who all the players are. There's the event organizer (who has hired you or at least invited you in) that you would pay, the attendees (who pay you directly) and "you." Are there others with their hands out? Like the facility/venue?

[William Michael]

Thanks David. :)

 

I must admit when I type at speed, I do miss the odd `a` or `the` or `for` etc.

 

 

On being separated by a common language: I do understand, (and sometimes NOT understand) your lingo. . . A while ago, there were some of my comments deleted and I was told they went to the `Circular File` . . .

 

 

I scribed a very nice eMail to the Moderator asking if I could have access to the `circular file` (to retrieve my contribution only) as I could not find the `Circular File` anywhere in the Photo.net directory!

 

 

Oops! 0:) [big Egg on Face, but still smiling]

 

 

WW

[david_schilling___chicago_]

:-)

[ibdnzgr]

The event host is a municipality. I am a vendor invited to provide my services, pretty much turnkey photography services. This year I charged nothing and left with nothing, other than my impending online print sales. I did make just enough onsite printing profits to pay my staff, travel and materials. The print sales are through a third party service so my profits are already after tax and cost of mailing, etc. It is a risk, but I was surprised by the success and speed of the print sales. At any rate, now the host wants a percentage of my profits and wants me to spend more up front in the way of staff, materials and time. Hope this clarifies to those who were asking. And I suppose the forum has answered my question.. that YES, it is not uncommon for a host to request a percentage of profits, particularly after they have established themselves as a known profit potential. A lot of events turn out to be duds in the way of profits regardless of how many people attend. This particular event has a high percentage of attendees actually wanting to order their photos.

[ibdnzgr]

It occurs to me that if they are going to seek their percentage as part of our our contract agreement, that I need to establish in the contract exactly what my profits are. Does that mean just income generated AT the event.. such as the onsite print sales... or does it mean income generated after the job is considered to be completed (and everybody goes home for the evening). I am not trying to make any vendor angry, but this is a legitimate question. Typically when a customer actually pays me money to cover their event, and even if I do it as a fundraiser with part of onsite print sales going to the host, or maybe the host getting a disk, etc.... I typically keep all proceeds from online print sales AFTER the event. Maybe THAT is the perspective and concern I am trying to convey.

[William Michael]

In regard to the perspective and concern that you are trying to convey, please re read my first answer:

 

`it is a really cheap site fee, even for a poor paying gig, with a get out of gaol free card if you make a loss.

 

At a suitable time after the event I would advise the convener of my net profit from the job, (after including THEIR 15 % fee as a deduction) and (assuming they are a Registered Business, for tax purposes), I would request they send me a Tax Invoice for that fee, which I would promptly pay. (. . . )`

 

These comments related to the prints sold (and orders taken, if you do that) AT THE EVENT.

 

Any other form of calculation to complete the 15% arrangement would be (theoretically) impossible.

 

Further, I do not see any reason to discuss this with the organizer; you simply take it as such and ensure any contract is worded to reflect same, if you go this route.

 

 

***

 

 

However, Further to my comments:

 

`IMO are playing a closed hand: the real deal will be next year.

Next year will reveal either they are a fair dinkum business partner with long term goals or if they are setting you up to screw you. (. . . ) etc.

 

If I understand correctly that a `Municipality` is a Local Government body or Organization funded by Government taxes, then the rationale for them now charging this fee might be different, (such as a move to outsourcing budget distribution global funding; each sector or event needing to be cost neutral, or the like).

 

Therefore, IMO it is less likely that they are playing their hand close to their chest, and more likely that they are on a road they have not trod before, and feeling their way with it: if this assumption correct, is it is important, (if you wish to continue with the relationship) that you set the template this year, as how you want it; because it is likely to stay that way.

 

If I were in the same position I would be more likely to re negotiate and suggest a set fee.

 

Most likely I would let them set the first $ value, explaining that I needed to do my maths on any proposal they had; then I would negotiate it WAY downward.

 

I would explain that there is a REAL cost you, by expanding the set up and putting on more staff, at THEIR request: really that is becoming a site fee in itself, isn`t it?

 

Explain that you need to quantify the economy of the gig before the event and especially before the gross capital expansion they are requesting.

 

Then argue that this extreme capital expansion combined with the history of print sales from prior events PLUS the unrealistic $ site fee they are claiming, will most likely end in a large net loss to you: so they cannot have it both ways, can they?

 

A set fee will also avoid all the argy bargy with the percentages and keep the (non business oriented) bean counters away from extrapolations and (irresponsible or uneducated) commercial decisions which might be made by the Municipality next year.

 

 

It is very difficult to grasp the nuances of the business scene and the players at this distance, but, prima facie, upon the new facts disclosed I would be doing some negotiation: and I note that time is most likely on your side of the bargaining table.

 

 

 

WW