In running a professional photography business, there are many considerations that will affect your bottom line. It’s important to build your costs into what you charge your customers; your studio overhead, your camera equipment maintenance, your photo proofing solution, your printing costs, and even the auxillary items such as tax and shipping.
Let’s take a look at just one small item that can make a large difference in your profit margins: shipping. If you order prints from a photo lab, they will invariably charge you to ship those prints or products to you or your customer. If you then ship those products to your clients, you’re paying shipping again. While shipping is often overlooked when examining the price of products, it can add up to a significant part of your profit margin, especially on low-cost orders. For example, if a customer purchases 10 prints at $5 each, you have a $50 sale. If the lab charges you a $4.95 shipping fee (this seems to be a standard flat rate), if you don’t pass on that shipping cost or some portion thereof to your client, you are losing almost 10% of your sale; when coupled with the other costs you incur to take, share, and produce those photographs, you could be in danger of not turning any profit at all; let’s face it, while photography may be your passion, in order to keep pursuing that passion, you have to bring in a little cash.
There are various ways to determine what shipping costs to pass on to your customers; you will need to learn what your photo lab charges you for shipping (if you use a local lab and pick up your prints, you’ll have no shipping fees; however, think about the time it takes you to pick these prints up and the gas or transportation expense to get there, try to put a dollar figure to it). If you have products shipped to you, then you reship to your customers, find out what you spend to ship out (if you do this in high volume, you may want to set up an account with UPS or FedEx to receive discounted rates).
The no-hassle shipping calculations: these two methods are easy to set and forget. Use one of these options if you aren’t concerned with the exact numbers, you just want to not worry about shipping charges and hope that it generally evens out in the end.
1. Charge a flat rate – if you don’t want to deal with the hassle of calculating shipping costs for your various orders, just set one flat rate for all orders. Know that on some orders your customers will overpay and you’ll keep a bit of change from shipping fees, and on some orders you’ll have to eat the extra charges. Go this route it’s worth maybe losing a few dollars not to cause yourself a headache with the calculations, just make sure that at the end of the day you’re making money after all of your expenses are paid. With ShootProof, you can set a flat rate in your Price Sheet Preferences.
2. Charge a percentage of your sale price – this method also cuts out the tedious analysis and calculations and relies on the concept that the more expensive the item(s), the more it will cost you in shipping. This is generally true, as a larger quantity or large sized item will generally raise the shipping cost. This method probably requires a one-time calculation of how much you are charged for shipping; take a look at the shipping cost on your last several orders and see if you can find an average percentage that you paid. Input this percentage into your Price Sheet Preferences and again, be aware that on some orders you’ll keep a little extra of the shipping charge, and on others, you’ll end up spending more on shipping than you paid. Periodically check back, and if you’re losing more than you’re gaining, raise you percentage a bit.
The more calculated method – takes a little bit more time to analyze, but can help you avoid overcharging your customers or shortchanging yourself.
3. Set per item shipping charges – check out your photo lab and see if they charge different shipping rates for different items. If so, translate these shipping charges into your price sheets and pass on the fee to your customers. Be aware, though, that the cost of shipping 1 4×6 print and shipping 50 4×6 prints may be the same; you don’t want to end up charging your customers an outrageous shipping fee if it’s not necessary. If most of your orders are high volume (your customers order many products from you with each order), you may wish to set low per-item charges, OR, you can choose to set a per-item charge only for those items that you know will directly cost you a bundle. The most effective way to use a per-item model is to combine a per-item charge only for those bulky or heavy items with a flat or percentage rate (a flat rate of $4.95 shipping, with an additional $8.00 for each gallery wrap, for example). In ShootProof’s studio control panel, you can choose any combination of shipping calculations, just ensure that you’re not charging customers a flat rate and a percentage, and a per-item charge, be thoughtful about how to combine these methods.
Make sure to revisit your shipping charges occasionally and make sure that you are not too far off in the charges you are passing to your customers; most people who shop online expect to pay shipping, but an outrageous shipping cost may result in a lost sale. At the same time, don’t let your profits slip away with extra charges that you’re taking on.