When it comes to pricing, the photography business is in a “downward spiral” – but it doesn’t have to be that way for everyone, said photo business guru John Harrington. In the process of doing research for the new free guide “Starting a Photography Business” I asked him how a photographer can figure out what their pricing should be.

The interview was done via Skype (and I recorded the whole thing, you can watch it below).

Harrington is a Washington DC-based photographer and the author of the book “Best Business Practices for Photographers.” While answering my question, he brought up a few very interesting points, including:

1) Photographers new to the business often charge a lower rate because they feel they lack the experience needed for higher fees. Harrington says that this is a mistake.

If a photo editor has decided that a less-experienced photographer is capable of doing the same assignment as a well-established photographer, then there is no reason why the rates should be vastly different.

“If the market has determined that both are capable of doing the job, then there is no reason why their fees shouldn’t be similar,” said Harrington.

2) One great resource that can help you understand what your rates should be is the NPPA’s Cost of Doing Business Calculator.

It’s an interactive worksheet that will take you, step-by-step, through the various costs involved in doing business. It will show you what your true costs are – and many photographers are surprised by the numbers because they’ve never looked at the big picture, and often take many expenses for granted.

During the interview, Harrington explains how a photographer may use the calculator and come up with a hypothetical hard cost of $200 (as an example) just to cover their normal expenses.

“When the phone call comes in from a photo editor, or a corporate client, saying ‘we budgeted $200 for a headshot,’ or ‘we have $100 for an assignment for the newspaper for the day,’ you’re then paying for the privilege of doing that shoot. And that’s not economically sustainable.”

“Every job you do needs to be a profitable one. At the very minimum cover your hard costs, to do that,” he said.

Throughout the interview, Harrington gives pointers on how to negotiate with a client when their budget is unrealistic.

“It’s a downward spiral. If everyone is trying to undercut everybody else, eventually we’ll get to zero. You just don’t want to be a part of it. Set your rates based upon what your cost of doing business is, [and] what you feel you’re worth, and take it from there.”

Thanks John. :-)

By the way – John Harrington, and PhotoShelter CEO Allen Murabayashi, will be speakers at the NPPA 2011 Business Blitz seminar in Washington DC. Just the lineup alone is telling me it’s gonna be a very worthwhile event.

Learn more by downloading our free guide “Starting a Photo Business”