> What I don't see in any of this discussion is talk of time. Ken seems to
> have his materials cost calculated, but what about time? How much time
> is spent creating the prints, to say nothing of getting the shot, or
> spending a gorgeous weekend sitting at a fair selling (or not) your
> work. In addition to materials cost you want to factor in your time. (To
> say nothing of equipment space in your house, ect.)
I did include direct cost of production along with my 4X factor, which
locks in a profit margin and covers the ancillaries of running a
business. But that figures in the cost of doing business with a
tangible item. The photography side (capture, edit) is all intangible
and ALL overhead.
> I occasionally wander the isles of many of these fairs or markets and it
> strikes me that the vast majority of these folks are loosing money if
> their time is worth anything. How many $50.00 prints do you need to sell
> on a given Saturday to cover not only the materials cost but the travel,
> cost of the fair and the 8 hours you spend sitting there? I wonder if
> most people doing this have any idea.
A typical fair will cost you $200 for the space rent, give or take.
Round trip travel (average across multiple fairs) is 150 miles or
about $80 in mileage costs. Food/Drink another $20. So, your hard
costs are $300 just to show up. Booth equipment wear-and-tear and
display upgrade/replacement is another $50 per show. Product damage
and "shrinkage" is at least another $50 per show. So, you're at $400
without even considering time. Now, consider that your profit margin
on the stuff sold is somewhere between 50% and 75% (at best), you need
to do a little algebra.
If the profit margin is 50% and you need to cover $400 for the show
costs, that means you need to gross $800 for the show JUST to break
even. $800 minus cost-of-goods $400 = $400, which is the cost of the
show.
Let's say you actually want to make a little money for your time.
You'll have 20 hours wrapped up for the show (travel+show) and you
value your time at $10 per hour. That means you need to make another
$200 in net income. That's another $400 in sales. So, you need $1200
in gross sales with a 50% profit margin on your inventory JUST to
break even. Of course, the tax man wants his piece of the action, so
you'll want to earn at least twice that amount, so you are up to $1600
in gross sales with a 50% profit margin on your inventory. This isn't
just for one wildly successful show, but the average for EVERY show
for the season.
The people who actually make money doing this, over time, will have
very low inventory costs by doing more of their own. I don't think it
is possible for a photographer to ever make a profit if he/she
outsources the printing. Simply impossible. If you look at the people
making real income at these shows, you'll see that they are
craftspeople making stuff out of nothing. How much does a blob of
glass cost for glass blowing? How much does a spool of wire cost for
making wire sculptures? How much does a watercolor cost? Why is it
that some people do paintings on busted up tiles, bricks and hunks of
barn wood instead of canvas on a stretcher frame? You MUST
cost-contain the production of your product and if your product is too
expensive to produce then you must choose a lesser expensive solution
in order to get your profit margins high enough. It's like an Italian
restaurant. You'll never make a profit if you buy your sauce already
made.
The above breakdown only covers the tangibles of product sales, not
the intangibles of actually being a photographer with the costs
involved in the creative/capture side of the business.
--
Ken Norton
ken@xxxxxxxxxxx
http://www.zone-10.com
--
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