Discounts: Do They Generate Enough Revenue?

Posted on 8/10/2017 by Jim Pickerell | Printable Version | Comments (2)

A reader has pointed out that Image Source is offering its customers using the promo code AUG50 a 50% discount on any image purchased during the month. Cavan Images is also offering a 25% discount all month if customers use the discount code CAVAN25.

Will temporary discounts bring in more customers and result in more sales overall? In my opinion such sales may help agencies hang onto existing customers for a while, but as soon as they go back to full price their customers are likely to start looking for cheaper sources.

It seems unlikely that Image Source will draw many customers away from microstock suppliers because even at 50% off, their prices are still higher than most of the microstock suppliers.

Will sales cause existing customers buy more images than they normally do, just because the images are cheaper? That seems unlikely because each customer’s demand for images is relatively stable and tends not to vary greatly year-to-year although there may be month-to-month variations.

Granted, August tends to a slow month because buyers are on vacation, but if buyers can be convinced to purchase in August in order to get the lower price that probably means they won’t buy as much in September.

Stock photo customers that have been using other options – microstock – are not going to switch just because you are offering a sale price that is equal to, or still higher, than what they have to pay at their microstock source.

My reader points out that brick and mortar retailers in the U.S. offer such discounts all the time to try to get customers to come back to their store and buy something else. They also use discounts to get rid of excess inventory that they have purchased. Excess inventory is not an issue in the stock photography business.

What’s A 50% Discount Mean

At the discounted price, how much of an increase in sales is required just to break even? With 50% off, you must make twice as many sales to generate an equal amount of revenue. That seems highly unlikely.

Assume you’re currently making 100 sales for $100 each. That equals $10,000. You need $5,000 to cover your overhead and profit. Creators receiving a 50% royalty collectively get $5,000.

Suppose you can increase the number of sales by 50% and get 150 sales instead of 100. Gross revenue generated is $7,500. You get to keep $3,750. The suppliers take a hit, but maybe you can cut your costs enough to continue to operate on $3,750.

The reader said, “My point is, there are premium “high” normal retail prices, but there are also a myriad of ways to get a discount; including just asking for one.  Anyone who actually pays premium price is someone who simply does not know about the discounts available, or does not care.”

The problem is that this is not a long range path to success. If everyone else is doing it then regular discounting may be necessary to hang onto customers. Long range it is unlikely to work until your discounted prices are in line with the real prices of your competitor.

It is worth taking a look at Getty and iStock. Back around 2010 iStock and Shutterstock were the two leader in the microstock arena. iStock was way ahead in terms of revenue generated and they argued that the reason for their significantly higher prices was that they offered premium, exclusive content.

Customers started drifting to Shutterstock. iStock’s revenue started declining. Shutterstock’s revenue increased. iStock lowered its prices somewhat, but not enough and they continued to lose sales while Shutterstock’s sales continued to grow. It wasn’t until around 2015 that iStock managed to finally get their prices pretty much in line with Shutterstock’s. Since then iStock has generated a relatively consistent level of revenue quarter-to-quarter. However, the revenue iStock generates now is about half of what it was at its peak in 2010.

My reader also said that one way to get a discount is “just asking for one.” Getty’s Premium Access discount is basically set up this way. The customer tells Getty what they need and what they’re willing to pay. Getty says YES. It is hard to get a much better price deal than that. But long range it doesn’t lead to revenue growth.

Copyright © 2017 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, 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:  


  • Anthony Harris Posted Aug 11, 2017
    Hi Jim,

    Discounts of this level are designed to create interest amongst clients who have never purchased or have not done so for a long time. We have had great success in the past bringing back customers looking for premium content and then worked to establish longer term relationships. Price sensitivity is an issue that we all have to contend with and which we have a number of tools to address. Discounting both offered proactively and reactively is just one of them.



  • Anthony Harris Posted Aug 11, 2017
    One other thing to bear in mind from a photographers perspective is that even at a 50% discount the royalty payable is higher still than if we lose that sale to an agent who takes a large royalty before passing on to us the net.

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