Erudite Expressions (Prints)

On Prices, Demand, and Value

I’ve been thinking about the sale of prints on my photoblog, Erudite Expressions, recently. Basic economics dictates that when you’re not selling something, it is either because your price is too high (in which case, customers may buy substitute products from someone else) or that there isn’t demand for your product (so even if your price is low, customers will not buy it).

I have found out first hand that in my case, the amount of prints that I do sell isn’t entirely related to the price point. I had a sale about two months ago where I was hardly making a profit from the prints I was selling, and the demand for the prints was surprisingly low. I surmise that even if I offered the prints on sale for a price below which it costs me to print and ship to the customer, I would still be struggling to sell the prints. One may then interpret that the demand for my prints is low (due to a number of reasons, such as quality of my work, willingness and ability of the consumer to buy the prints, etc.).

However, I’ve extensively pondered the quality of my images compared to what I see around the web, and I can honestly say that the ratio of the price of my prints to the quality of my images (and the paper on which they are printed) is low compared to what other photographers (photobloggers) are offering. I believe that the demand for prints is low because I am not marketing myself enough.

So what could I do? Increasing viewership of my photoblog might help, but it doesn’t necessarily mean that I’ll have more buyers of prints (I found this out the hard way through my “marketing campaign” in Spain, in which I traveled with a group of people who were in the same places as I was, and yet I haven’t established enough of a connection with them through my images for them to own a print). I could decrease prices, but again, I found that decreasing prices won’t impact demand dramatically. The last option I was considering is to increase prices.

You’re probably thinking, “What? Increase prices? How does that make any sense at all?” Well, the idea here has to do with the fact that higher prices make individuals inherently think that there is a higher quality product associated with the price tag. Here’s an example dealing with cosmetics. If there are two lipsticks on sale and they have identical colours, the one that is priced higher may actually be demanded more by the consumer because the lower priced lipstick may indicate lower quality ingredients, and what woman wants to apply an inferior product on her lips?? So am I implying an upward-sloping demand curve here? In fact, yes. In a way, the prints should be considered (at least in theory) a Giffen good.

Let’s shift the scenario to photography. Suppose you’re looking for a wedding photographer, and you found three photographers advertising their business with the following price points: $200, $1000, $5000. Let’s assume for a moment that they are all going to invest the same amount of time shooting your wedding and providing extra services, such as burning all of your digital negatives on a DVD. Let’s further assume (and yes, this is a very strong assumption to make, but bear with me here) that these three photographers have equal experience and post-processing skills to edit your photos. Which photographer do you choose? Say you don’t have a large budget, so you immediately eliminate the photographer who is charging $5000. This leaves you two choices, the $200 photographer and the $1000 photographer. Here is where you need to make a decision, and where demand for these photographers is not directly linked to how much they are charging. Something about a photographer who charges $200 screams incongruity. It is almost too good to be true that you’re going to get a spectacular deal, especially since this photographer’s experience and ability (based on their portfolio) is very similar to the other photographer who is charging $1000. What may end up happening is that you start doubting the $200 photographer. In other words, something doesn’t add up. You will search for the inconsistency, the loop-hole, the fine print. Representative questions that you may begin mulling in your head will be: “Will he show up late to my event?” and “Will he promise to deliver everything and without conflict?” If there is doubt (brought about solely on the cheap price point of $200; i.e., your doubt is not based on the photographer’s experience or quality of work), you will be tempted to select the $1000 photographer. What’s key here is that the photographer who is charging $200 is essentially *de-valuing* himself and his abilities by charging so little (even if he has good reason to do so, such as trying to get more work to pay off bills, etc.). In the end, based on your doubts, you will end up selecting the mid-range $1000 photographer because he’s not *de-valuing* himself but at the same time he is not charging a fortune.

So what’s my point here? I believe I have been devaluing myself by setting the prices of my prints so low. Over the last few months, I have noticed a giant incongruity based on the quality of my work and the prints I offer for the price I charge. I believe my inexpensive prints may cause some kind of doubt to arise in the would-be buyer. Questions such as “Can I honestly expect my print to be delivered in four to five days?” (the answer is yes, by the way) and “Will the prints come packaged well?” (another yes) might trickle through the buyer’s head. In effect, these questions of doubt will make the buyer/customer ponder whether I will be able to deliver the goods based on the price at which the prints are offered. Now, in this particular case, the would-be buyer might not necessarily seek another buyer of prints (as compared to the person who is actively seeking a wedding photographer, and needs to find a photographer by a certain deadline). However, even if there are no substitutes, there is still the principle of “Well, I have these doubts at this moment in time, so I just won’t purchase.”

So, the sensible solution seems to raise the prices of my prints. Effective September 1, 2008 the prices of prints on my photoblog will increase between 20% to 40%. I hope the prices of my prints will still be affordable, but at the same time this move will shed potential doubt from would-be buyers about the quality of my work (since I do value it).

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August 26, 2008 Posted by | prints | , , , , | 4 Comments