Pricing Photos: Instagram Image on a Coffee Bag

Pricing Photos: Instagram Image on a Coffee Bag

This is the first of a series of articles to address real-world photo pricing scenarios.

The Brief:

A graphic designer who maintains a Instagram account was contacted by a design agency to use some of her Instagram photos on a coffee bag.

“We’ve been working on branding for a new hotel in [redacted] and I’m now putting together some designs for coffee bags that will be sold in the restaurant. One of the thoughts we had was to use lifestyle photos of [location] on the bags…there’d be only one coffee blend that they’d sell, but there would be four different photos on the front for guests to choose from. The coffee would only be available to purchase at the restaurant in the hotel.

“I threw in a few of your shots that felt right for this. We’re still working on presenting this concept to the client but our thought would be that you’d get a credit on the sticker and there could be a small write up near where the coffee is displayed. As well, the hotel would post the collaboration on social media, etc.”

The client would print 1,000 bags of each Instagram photo. This is a small market (<400k population).

How would you price it?

We asked three photographer how they would approach the project.

1. Sol Neelman, Portland, OR

Whenever I’m in such a situation, I reach out to a photo agent friend in LA, who does consultations on the side. And when photo friends ask me for advice on pricing, I always suggest they do the same. Best to work with someone with proper experience providing estimates, rather than me blindly throwing darts. Plus, photo agents often know the art buyers and agencies well enough to smoothly find a proper rate, not to mention iron out any issues that arise during the project.

The commission I pay, which can be a large chunk of cash, is such a small price in the big scheme. And it allows me to focus on the project and making clients happy without getting bogged down with the business side. Can’t tell you how much better I sleep knowing I have an experienced agent working on my behalf, especially when things go sideways.

2. Chip Litherland, Sarasota, FL

At first glance, this is a pretty simple request for stock, which could be done simply through a sale on my Photoshelter archive site. In fact, you can go onto my site, price out retail packaging for a food product with the extra breakdown of region (1 state), distribution (1,000 units each), and placement (front) and it spits out a price of $825 per image – which was generated from the Fotoquote embedded tool. At four images you’re looking at $3,300 total for an initial run of 4,000 bags of coffee. I’d be happy not having to do much of anything and sending a link for the designer to download and pay. After fees and taxes, that’s not bad for 30 seconds of an email. It’s the beauty of retaining copyright and making quality marketable work.

All that being said, I would ask some questions first to get a good sense of what this firm actually needs and to limit that usage to that. I would ask if they have a budget and if the answer is no, then I would move on and end the conversation. I LOVE coffee, but I would never get enough in barter to make “free” work. If the answer is, “what would you charge?” then it’s off to find that sweet spot. I would do some research as to how much they are charging. Based on an average price of a bag of coffee of $10 (to make the math easy), they’re bringing in $40,000 from this initial run if they sell out. I have no idea what their profit margin is there, but looking at $3300 ($825 each) for just licensing the four photos may or may not be too much, but it seems like a number I’d be happy with starting with. I would only discount if they get up to 6 or more images, in which case I would do a percentage discount for 6-10, 10-25, 25 + but in this case it’s just the four. I always offer a discount, though, after the initial license to help spur more resales. In this case, I’d offer 25% off each additional group of 1,000 units they do, which saves them money long term if it takes off but keeps money coming in.

I never want to go into a relationship starting low just “to get my foot in the door.” It’s already in. I want to kick the door open and really price my work fairly, not over charging, in order to keep a positive customer relationship going. I never worry about coming in too high, because once you throw a number out, they’ll either balk and say “whoa” and run away, which means you are way too far off in prices any way to make it work. If you start low, you stay low.

3. Jenna Isaacson, Portland, ME

In this situation I’d definitely try to feel out if there is more potential to work with the design firm for the hotel/restaurant to be had beyond the bags themselves before creating an estimate. If the photographer is already in the same city as this new hotel/restaurant, are there other image branding needs the design firm has for the hotel? Would they be interested in looking at other images beyond the ones on Instagram? Perhaps they need imagery for the walls of their conference rooms, lobby, website?

If they don’t want to commit to any other potential work, use that as a sign that you should be firm in pricing what they initially asked for. People are notorious for choosing food products based on the prettiness of the label, so they’re obviously saying they think your images will help sell their product.

Four images, 1000 bags of each image– I’d say at least $4000, as there will likely be additional use (marketing materials, etc) to go along with the product. If there is a desire, once they sell out of those 4000 bags, to use the image again, retain the right to re-negotiate the rate. Possibly a percentage of the sales.

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What did she charge in real life?

The designer requested $100/image and the offer was accepted without further negotiation. As photography is not her primary income stream, she thought this would be a good introduction to the firm for future design/illustration work.

Analysis

The design firm took advantage of the “anchoring effect” by effectively making the first offer of $0 and exposure. Countering with $100 therefore seemed extravagant, but the lack of negotiation over price suggests there was more money available. Would the client have paid 10x what they did? We asked!

The Client Says

We wouldn’t consider this a typical scenario, but our query to the design agency for more information in the spirit of helping to educate other creatives was answered. The designer responsible for the project responded:

“The coffee bags were a small part of a much larger project of rebranding a new hotel in [redacted]. In our contract we had a number of projects that were built into the scope but as we are nearing the opening date there are a number of small tasks that are trickling in with small budgets that need to get done to help broaden the brand’s reach within the space.

“Since the hotel is being completely gutted and refurnished we’ve had to resort to using stock photography for the project conveying more of a lifestyle experience than a literal one as rooms and details aren’t done yet. Since the entire renovation of the hotel has so many moving parts things like photography budgets get nipped and constrained as construction costs balloon forcing us to be creative in how we treat stock photos and find photographers.

“Part of the brand positioning of this particular hotel is to connect with a local creative community of makers and doers in [redacted]…The concept with the coffee bags is that we feature a local Instagram photographer every six months or so with a series of shots on the bags so customers can grab whatever photo they like best and take home or give as a gift…

“So ultimately, there wasn’t really a ‘budget’ for photography on this particular project. This was a small piece of a very large puzzle, but we felt that using local talent was a good way to support the community and get a great end product. Our hope was that since we couldn’t offer much money the exposure would be a viable trade. [redacted] needed to get some money and we originally agreed on a low fee of $50 per image but as our agency learned more about the number of bags being produced it was agreed upon that we’d do $100/shot.

“Now, the trick for us is to show the value to the client. $100/image was about the max we could have gotten for this particular project. We could have just used the stock we had purchased for other parts of the project for free and that’s hard for a client to understand. Ultimately, it seemed like a good fit and our client agreed once we talked them through how they could use this collaboration in their social media channels as well.”

You might argue that if photography is so important, they should have found the $800-1000/image that our three photographers quoted. But the designer provided this guidance:

“Nearly every agency wants fantastic original photography for each and every project they work on. It makes the work better. Period. But, ultimately, when client’s choose and agency and agree to pay them a fee, they don’t often realize that things like photography aren’t included. So they’re paying the agency $X and when we suggest photography there’s always a grumble. Most of the time we’re stuck trying to make stock look original as budgets have already been set. We try to be up front about these things but it doesn’t always get through.”

Conclusion

Most designers that we’ve spoken to in the past are strong advocates for photographers and great photography, and aren’t looking to nickel and dime their fellow creative. We often suggest the photographers directly ask what the budget is for a particular job. Understanding the context of the project (e.g. the designers are trying to promote local artists instead of using stock) arms with photographer with better data to either accept or walk away from the job.

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This article was written by

Allen Murabayashi is the Chairman and co-founder of PhotoShelter.

There are 9 comments for this article
  1. Darrell Noakes at 4:56 pm

    Still, you have to wonder if the agency would have taken the job if the roles had been reversed. That is, would the agency have been willing to work for credit and exposure, and settled for $100, just because the hotel had a long sob story about costs and budgets? I doubt it, so I call BS on the agency’s rationale. I’m not sure if the photographer could have held out for $800 per image, situations being what they are when budgets are set without thinking ahead or consulting with all your potential suppliers and knowing that a million Instagrammers would be happy to settle for the notoriety alone, but the photographer could have held out for more than what they got.

    • Allen Murabayashi Author at 12:28 pm

      You make a valid point.

      When it comes to stock photography, it’s a tough situation b/c there is legitimately stuff out there for $10, whereas you can’t really hire someone to shoot for your for that amount. But if she asked for $150? $200?

      • Fredrik Naumann at 5:57 am

        I think the issue of available alternatives is critical in this sort of situation. Some images really are dime a dozen, and available only a click or two away. Obviously if the images are unique, hard to find or replicate and time is essential, the client will be more willing to pay a “proper” feee.

  2. Barton at 5:45 pm

    So the problem is the agency lowballing in the first place! If they are getting the job by (deviantly I think) not letting the client know there will be additional costs, then they are misleading the client. Imagine if an architect failed to mention to a client that they would ned to pay for a builder and materials …

    The explanation from the agency is a cop out.

  3. Mark Dunton at 10:11 am

    I find it interesting that the hotel is taking on a whole re-branding, and aside from maybe some pictures of the property taken during your stay, these are the items they take home, that represent the brand away from the property (the coffee which is only available there), is something their friends see, an image of the bag they post on Pinterest, but that portion of the budget was nipped because other costs are more important. Been in construction and construction management for many many years, and if they are snipping here and there from non-Critical Path items to meet the budget, this bring up other red flags. Like your contract says Net 30 and they end up paying Net Whenever, due to running out of money on the bank draw. And is highly likely you will have to catch them using your images after the initial run, because let’s face it, if they cheaped you on the price, they certainly are NOT going to call you back to spend MORE money. And lastly, and this is my opinion only, $100 an image is really a disservice to other photographers trying to earn fair value for their work.

  4. Todd Bigelow at 11:55 am

    I don’t advocate asking a client up front about a budget as it allows the client to set the initial value of your image. Instead, issue a well prepared quote indicating a willingness to negotiate as this allows the photographer to set the value for the image. If the photographer knows their floor for negotiation, understands the difference between commercial and editorial, and is willing to say “no thank you” to terrible offers, then it’s a simple process.

    I deal with these requests fairly regularly. I received a request just last week from a major publishing company requesting use of an Olympian I shot in ’08 for Sports Illustrated. The initial email said their “standard fee” is $50 for online use (no further definition of the use) and would I grant them use. I responded thanking them for their interest and, with no reference at all to their $50 “standard fee,” attached a quote (FotoQuote) with terms and the licensing fee. The quote was signed and accepted.

    Bottom line is that most companies will try to get the cheapest use and often succeed. Let’s put it this way, I’ve never had a company email and state “We have a HUGE budget, what will it cost to use your image?” These are your images, your livelihood. Set the value, if it doesn’t work after fair negotiation, no problem, thank them and move on.

  5. Nick Gleitzman at 9:27 pm

    “But, ultimately, when client’s choose and agency and agree to pay them a fee, they don’t often realize that things like photography aren’t included.”

    Why not? A professional agency can’t give a quote for their own services without a brief, and they should be making it clear that if photography is required, whether stock or commissioned, that additional fees will be payable. I understand that this particular usage was a last-minute addition to a much broader project, but going into a project of this scale without at least some contingency is ludicrous. It virtually dictates that usage-for-credit is the first option considered. Why is it that so-called professional users of photography still don’t get that if they (or their clients) are going to make money from using images, the creator of those images deserves to be paid a fair price as well? And by fair, I don’t mean $100 a shot.

    Oh, and ” … when client’s choose and agency …” Don’t get me started.

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