Tips For Negotiating Rights Managed Stock Sales

Posted on 9/8/2009 by Jim Pickerell | Printable Version | Comments (0)

The following tips apply to every sale for any use. Read through this section before quoting a single price.

  • Ask the client to fax a comp if you are unclear on how the image will appear, of if they are asking you to lower your price. Once you get the comp, you may realize that the image is larger (or more dominant) that the customer was portraying. Or, having seen the comp and feeling comfortable about the use, it may give you justification for lowering the price.
  • Don’t ever feel that you must negotiate the entire sale in a single phone call. Whenever you need to revise a price or consider a client’s offer it is fine (and in many cases, recommended) to tell the customer that you will call them back in a few minutes. Hang up and get your thoughts organized before calling back to negotiate.
  • What happens when someone asks for a price in a category that is not covered on this site? Chances are that, even though the customer is not using the same words we use here, the use is very similar to one we’ve outlined. Ask questions to try to determine if there is some other category of use that should be applicable.
      Does the use somehow promote a product or service, or is it strictly of an editorial nature?
      Is the customer purchasing advertising space from a publication (print advertising) or are they printing the promotion material at their own expense (brochure)?
  • Be careful about asking a customer what their budget is, or how much they are looking to spend BEFORE you quote a price. First of all, they might under quote their budget to try to get you to license the image for less. (When someone asks you what you’re willing to pay for something, do you really tell them your top figure? You probably tell them less than you know you’re willing to pay, knowing that you may have to negotiate up before the sale is completed.) In addition, asking them what their budget is sets the tone that they can dictate what the photo is worth. It is your job to TELL them what the photo is worth for the use they plan. Then, if they say that their budget is much lower than that you can start negotiating. But don’t put the customer in the driver’s seat right off the bat.
  • Don’t automatically lower your price because your image may not be very unique, or because the customer says he can hire someone to shoot the image for less than you are quoting (page 233). Maybe he can find a similar image in microstock, but he didn’t. Don’t underestimate the fact that the customer found your image and it works for his current project. He can’t be sure he can find another image for less that will work as well as yours. If he knew that was possible he would have already used that image. If he can’t complete this negotiation successfully he will have to start his research all over again. Not everyone is motivated by price alone.
  • Don’t be afraid to quote a price that you think the customer may not like! If you think the price is justified, quote it and be prepared to defend it. It is very rare that a customer will hang up immediately when he hears a price that exceeds his budget. Most will try to negotiate. Quote the price and wait for the customer’s reaction. If you get a negative reaction (or no reaction at all), you might say something like, “It sounds like that price wasn’t what you were hoping for. What price were you expecting?” Then, if they tell you what their budget is, or what price they are trying to get, you will know where you stand in the negotiation.



    For instance, if you quoted $1,000 for a use, but the customer’s budget is only $200, you know a lot of negotiation will be required to reach a reasonable compromise. (Or you may feel it’s not worth pursuing.) On the other hand, if your price is $1,000 and the customer says all they have to spend is $800, it may be much easier to find a compromise position.
  • While some sales will require a certain amount of negotiation, there will also be times when the client simply accepts your initial price with no problem. So be careful not to talk yourself into reducing your price before quoting the initial price.
  • Be prepared for a customer that does not understand why you need so much information to quote a price, or can not understand why your prices are so out of line with the “sources they usually use for photos.” This customer may be used to buying microstock images, or they are just new to buying stock images altogether. Explain, that in order to be fair to all customers you base your prices on the value the customer will receive from using the image. In this way those who receive great value pay more than those making smaller, less significant or personal uses and the sum of all those varying prices allows you to cover your costs and make a small profit. Explain that being able to make a lot of sales to small users for small amounts of money enables you to keep your prices more reasonable for those few customers who benefit greatly from using the image.

    If you charged everyone what it cost you to produce the images, taking into consideration that a huge percentage of the images you produce will never sell and the costs for those unproductive images must be covered as well, very few people would be able to afford your images. On the other hand if you charged everyone the same price that you charge those making personal use of the image, you might make a lot of sales, but it is extremely unlikely that the volume would be great enough to allow you to cover your costs and earn a living.

    If they then ask you how all those microstock photographers can do it, point out that less that one-percent of photographers selling images at microstock prices earn more than $10,000 a year and that you, who are trying to earn your living taking pictures, can not cover your cost of operation and support yourself on $10,000 a year. Most of the microstock photographers have other ways of earning a living and engage in the microstock business purely for the joy of knowing that someone likes their image enough to use it. But, if the customer can find an image that fulfills their need at a microstock price they should certainly use it.



    Most customers faced with this answer will buy your image.

    You may want to try to explain that you cannot be responsible for another seller’s price. But that your price is based on what you need to charge to stay in business. Be prepared to lose the sale if the customer expects you to charge the same that those not trying to earn a living would charge.

  • Copyright © 2009 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.  

    Comments

    Be the first to comment below.

    Post Comment

    You must log in to post comments.

    Stay Connected

    Sign up to receive email notification when new stories are posted.

    Follow Us

    Free Stuff

    Stock Photo Pricing: The Future
    In the last two years I have written a lot about stock photo pricing and its downward slide. If you have time over the holidays you may want to review some of these stories as you plan your strategy ...
    Read More
    Future Of Stock Photography
    If you’re a photographer that counts on the licensing of stock images to provide a portion of your annual income the following are a few stories you should read. In the past decade stock photography ...
    Read More
    Blockchain Stories
    The opening session at this year’s CEPIC Congress in Berlin on May 30, 2018 is entitled “Can Blockchain be applied to the Photo Industry?” For those who would like to know more about the existing blo...
    Read More
    2017 Stories Worth Reviewing
    The following are links to some 2017 and early 2018 stories that might be worth reviewing as we move into the new year.
    Read More
    Stories Related To Stock Photo Pricing
    The following are links to stories that deal with stock photo pricing trends. Probably the biggest problem the industry has faced in recent years has been the steady decline in prices for the use of ...
    Read More
    Stock Photo Prices: The Future
    This story is FREE. Feel free to pass it along to anyone interested in licensing their work as stock photography. On October 23rd at the DMLA 2017 Conference in New York there will be a panel discuss...
    Read More
    Important Stock Photo Industry Issues
    Here are links to recent stories that deal with three major issues for the stock photo industry – Revenue Growth Potential, Setting Bottom Line On Pricing and Future Production Sources.
    Read More
    Recent Stories – Summer 2016
    If you’ve been shooting all summer and haven’t had time to keep up with your reading here are links to a few stories you might want to check out as we move into the fall. To begin, be sure to complet...
    Read More
    Corbis Acquisition by VCG/Getty Images
    This story provides links to several stories that relate to the Visual China Group (VCG) acquisition of Corbis and the role Getty Images has been assigned in the transfer of Corbis assets to the Gett...
    Read More
    Finding The Right Image
    Many think search will be solved with better Metadata. While metadata is important, there are limits to how far it can take the customer toward finding the right piece of content. This story provides...
    Read More

    More from Free Stuff