How much would you pay for this delicious cupcake? $5? $10? $20? How about $100? And why?
How much time do you think went into producing this cupcake? How much money do you think materials cost? Icing, flour, dyes, butter, etc? Do you even know?
And, how many cupcakes are available in your area? Are there ten stores within a one mile radius? Or just one?
Lots of questions, I know. But, I have a point. There are many factors that go into deciding what to charge for ANY product. And, if a business is run correctly, those numbers have been calculated based on cost of goods, time, materials, and of course, a mark up for profit. After all, it is a BUSINESS, not a HOBBY.
Many businesses fail within the first few years because they did not plan. They did not have a business plan or they did not calculate their costs correctly.
And, if the market is saturated with a product or service, and prices are extremely low, then everyone is just competing on price and it brings the industry down.
The industry of photography has changed dramatically, and I am not going to go into all the details, but I have found that consumers are not as concerned about photography as an art, but more important to them, is photography as inexpensively as they can get it. That comes first. In my market, there are many photographers who are hobbyists who are charging a very low price for digital images and there are many people paying it. Is that photographer making any money, really??
I do not know. I do not know how they run their business or what expenses they have, and there will always be somebody less expensive in any business.
Getting back to the cupcake, though. So, what are you willing to pay for that cupcake? Do you care what type of ingredients are in the cupcake? Would you care that the baker used a butter substitute rather than butter, or if they used "fake" powder sugar for the icing? What if you paid $10 for that cupcake and found out that everything was "fake"? Would it matter?
My main point, in case you have not figured it out yet, is that a lot of it is based on perceived value, what you are willing to pay for something, how much the industry is saturated, what market you are in, quality, and what you care about. If you care about your family, you will invest in them. Most people are willing to pay more for something of good quality because they care about whatever it is they are paying for. I would pay more for something based on excellent customer service even though the item might be somewhere else at a less expensive rate. I do avoid certain stores because the customer service is so poor.
With photography, it is the same way.
Below is a link that provides a lot of great info about pricing and photography and why it can cost more than $50 for a bunch of digital files. Remember, you are not necessarily just paying for a product, you are paying for time, materials, and overhead. And, you pay for those things at EVERY STORE YOU GO TO.
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