Bulk Pricing: Custom Menus

Posted on 5/20/2013 by Jim Pickerell | Printable Version | Comments (0)

Not all bulk pricing deals like the ones major agencies tend to engage in are bad. After reviewing the sales reports of a number of Getty photographers we’ve reported that from 25% and up to 40% in some cases of Getty’s total sales are for fees of $25 or less – often a lot less. (And this doesn’t include Thinkstock or iStockphoto sales.) These deals that Getty refers to as Premium Access are customized to each individual customer.

On the other hand, for photographers with collections of unique, not easily replaceable, images of subjects that are in high demand many customers will happily pay reasonable prices for the convenience of a bulk license or custom pricing menu.

Hans Halberstadt’s collection of Military Stock Photography is one of the very few sources of model released images of U.S. military personnel in all types of military activity. As a result he can command reasonable prices for his work. Most of his licenses are negotiated individually. However, below, he describes a few situations where he has found that bulk licenses and custom price menus have worked well for him.

'My regular customers use the same dozen photos over and over again," Hans says.  "In the past, every time they wanted to do a newspaper ad, a brochure, a web page, they had to come to me with the specs. I ran them through the FotoQuote crystal ball and then throw a number at them – a wasteful process for all concerned.  Now, I am doing two things to streamline this – bulk licenses and custom price menus."

Bulk Licenses

I had a frequent customer that I discovered had systematically been cheating me by not reporting true press run numbers.  Without confronting them directly, I just told them that in the future, there would be only ONE fee for newspaper advertising use, and that fee was for 5-million circulation.  They did a lot of newspaper advertising and you could hear the gasp from across the country.  But it occurred to me that they could pre-pay the license and I offered them this deal:

    Your company can use any of the images in my library for any purpose for one year for a flat fee of $XX,000 – one invoice, one check, no limits on circulation, good for twelve months only. 
They jumped on it!  Now, I had been billing them for far less than that previously, less than $10k per year, so this was a big growth in sales.  While I expected sticker-shock, instead they were delighted because the whole process of licensing the images was suddenly simplified.  They have renewed twice and are set to do so again later this year.  They only use a few images and I might have restricted the number, there’s no need to and they feel like they are getting a great deal.  I started offering the same deal to other repeat customers and found that some of them loved the concept.  We have three of these in effect and another likely later this year.

Custom Price Menus

I have another corporate customer who needs photos every week or so.  Every week this guy would send me an email with the uses and asking for a quote.  I worked up the quote and sent it back.  He decided yes or no and maybe we negotiated.  This was not an efficient use of our time on either end.  I knew he worked with other agencies and so I was sure he had numbers in his head for what he could spend for each of these uses. 

Finally, a month or so ago, I said, “Let’s go through all your typical uses and agree on a price list that you and I can both live with – you will know in advance exactly what a newspaper ad, a website use, a brochure cover will cost.  Then I let him tell me what he could spend on each of these and ALL of them were perfectly fair and reasonable.  At the end of twenty minutes we had simplified the licensing process for both of us.  I still invoice him for each of these, but we don’t re-invent the wheel every time they need a photo.  As a result of this, they’re using about twice the previous volume and are on track for a mid-five-figure year.
My intention with both of these plans is to make it as easy as possible for somebody to write me large checks on a regular basis.  Our traditional RM system discourages customers from buying licenses and RF makes it easy.  I am trying to make RM as easy, but to still get good fees for my images.  It seems to be working.

Copyright © 2013 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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