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Excerpt from, Photography: Focus on Profit Paperback with PhotoByte® CD-ROM 416 pages, ISBN: 1-58115-059-8 by Tom Zimberoff |
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Note from the founder of Garage Glamour™ -- This is fourth of several excerpts of Tom Zimberoff's book, Photography: Focus on Profit. Recommended by top educators as part of their curricula--this is a must have if you plan on succeeding in the business of photography--Rolando.
Low Balling
© 2002 Tom Zimberoff
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Charging lower prices and still making a profit, because it doesn't cost you as much as it costs someone else to do the same job, is called good old-fashioned competition. Billing an assignment for less than it costs to produce, however, is called low-balling.
Low-balling is an unfair pricing practice. It means hitting below the belt, taking jobs away from other photographers by radically and unrealistically undercutting the market. The photographer who low-balls a job has a corrupt idea of what it means to be competitive. He will try to win a job at all costs.
While there's nothing inherently wrong with that as a figure of speech, the low-baller makes it literal. Whether he has his way or simply forces his competitors to match his price, someone will win the job, indeed, at all costs. What could have been profit for the “winning” photographer is, instead, forfeited to the client. It is a gift that will go unrecognized.
Why do photographers do this? Partly, it's because of fear. They fear the loss of any immediate opportunity to ingratiate themselves with potential buyers. They believe that, by offering their clients favors--what favors!--by shooting assignments below cost, more and better-paying jobs will be forthcoming. But there is no quid pro quo between buyers and sellers. It is delusional to believe that undercutting profitability for any reason whatsoever will bring home the bacon.
The consequences of low-balling have less to do with one photographer's self-inflicted misfortune and low esteem than with the cumulative impact of this practice on the entire industry. Because of its imposition on other photographers, low-balling becomes an ethical issue. When one foolish photographer forfeits his profit, the loss is felt long afterward by everyone else, because the low-balled price sets a precedent. Such precedents can cause prices to tumble like dominos. Nevertheless, low-ballers try to defend themselves from criticism by pointing out that, in an open market, they are free to charge whatever they want. That's true. But it represents a perverted idea of freedom, one that is selfish and short-sighted. Well, that's putting it politely. It's stupid.
Ultimately, market prices will fall below sustainable levels of profitability for even the shrewdest photographers as they become obliged to compete with each other for lower-priced assignments. It's hard to reverse that kind of momentum because, once buyers see prices begin to drop, they will fight to keep them down. That fact will come back to haunt the culprits who have kept the low-ball rolling downhill. Sooner or later, they too will find it impossible to stay in businesses. They will fail, taking other, more conscientious shooters over the cliff with them.
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