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Old May 6th, 2008, 09:35 AM   #1
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How much is too much?

So, here is my question;

By nature my background is not wedding/corporate work, but it does help to supplement income from time to time. I have been basically doing contract work through a photographer, he provides the leads and after speaking with me in terms of price, etc he lands the contract for me. Now, bear in mind, none of the contracts have been earth shattering, and in fact when they get to that point, well, I'll get to that in a second.

So, when we initially sat down, he wanted to develop a multi-tiered package system to attract more customers. His previous video guy had a flat fee; $1,000.00 no matter what. For weddings, it did not matter if he shot the ceremony only, or ceremony and reception, and he did not do corporate work, period. He wanted to get away from this as it gave him no flexibility when trying to bid jobs.

I initially came out with some numbers in regards to what I needed to make the job worth it (for the sake of argument lets say I would shoot and edit a ceremony only shoot for @ $500.00). His initial reaction was that he could not charge as much as I wanted because people would not pay that, period. Now remember, I had no experience in this type of work so I was not aware what the market value was for most of this at the time.

Long story short, I came down in my prices to him so that he could charge what he feels comfortable charging. Everything good, right? well, not so much.

It has come to my attention that this person is basically taking my fee and doubling it as the final price to the customer. So if I did charge $500.00 for a ceremony only shoot, he would charge the bride $1,000.00. Now, this person has absolutely no background in video, and does nothing aside from landing the initial deal. I shoot (either by myself or with an assistant), edit, provide hard copies, and provide digital copies to the photographers business so that he can upsell more finished video to family and friends (which i get nothing from either), as well as talking to clients when its inconvenient for him.

I also had a situation where a client had asked us to take their old 8mm and turn it into a "show" to be presented at the bride and groom's reception, along with still from their childhood. Now, this is a high end client who basically told us that whatever it cost to get it done right he would pay, but that his daughter (the bride) is very artistic and they wanted something out of the box, not the normal slideshow deal.

So, I run a project that involves research to figure out the bride and groom's likes/dislikes, personalities, and what not and then turn it into a compositing monster that I spent three weeks on in AE. At one point the photographer asks me how much it will cost him and I tell him $2,000.00. He freaked! I had three other concurrent jobs running at the same time and he tried to pull all of them from me! After speaking with him at great length he came back to the old "I can't charge that" arguement plus the fact that I would be out of the country the week leading up to the wedding and during the wedding (true), and he felt that they would be making changes to this project up until the wedding day, and he should have never given me the project to begin with.

We agree for me to take $600.00 for my time, he takes some of the work files and guess what, turns it into a slideshow with Pro Show Gold (why do photographers like that program so much???). It took him two days. He charged the client $2,400.00 (I have seen the invoice).

And now, the question (finally);

How much is too much? Is it right for this person to take a 100% on my charge for getting the deal? Personally it seems high to me, since he is really just acting as a manager, a manager should make 10% - 15% usually, right?

I feel like he bull-dogged me down in my pricing so that he could take what he thinks is fair, and I can understand that if my prices were way out of line. but if he is tacking on 100% then it changes everything. Why should this person make the same amount of money as me when he did nothing but send a few e-mails, and if it was not for my work he would not get the money in the first place.

And the whole thing with the slideshow burns me up real bad. I do feel like I got bs'ed there, and screwed out of some money.

I have no contracts with him (shame on me) as we did all of this on a handshake basis (my wife is his second photographer and he treats her very well, most of the time).

Do I confront this (which will lead to me losing the rest of the jobs I have for the rest of the year through this person, as he will not be honest about what he pulls from my jobs) or take my lumps?
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Old May 6th, 2008, 10:33 AM   #2
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No offence Chris, but I think you have answered your own question. It's like the one time I had someone ask me to lower my price, this was way back when I first started in weddings. It bothered me so much that they tried to get a discount for nothing, that I knew the answer. The answer was, no.

So it seems to me that for you, like myself, to go to bed with a clear mind, you need to do what you need to get out from underneath this.

Like I said, I think you have answered your own question. But only you can answer that.

On the flip side, I had a photographer approach me like that once, and he sounded like a infomercial for broken elmo toys. Needless to say he didnt' call me back.
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Old May 6th, 2008, 10:36 AM   #3
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No offence Chris, but I think you have answered your own question. It's like the one time I had someone ask me to lower my price, this was way back when I first started in weddings. It bothered me so much that they tried to get a discount for nothing, that I knew the answer. The answer was, no.

So it seems to me that for you, like myself, to go to bed with a clear mind, you need to do what you need to get out from underneath this.

Like I said, I think you have answered your own question. But only you can answer that.

On the flip side, I had a photographer approach me like that once, and he sounded like a infomercial for broken elmo toys. Needless to say he didnt' call me back.
No offense taken. I just want to make sure I'm not way off base when I do confront him and about it and its some unspoken standard, or some other such nonsense. I could believe it coming from other people who have an impartial view but not from him.

If everyone chimed up that the ways things have gone is normal I would have shut my trap.
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Old May 6th, 2008, 11:44 AM   #4
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Chris,

It seems that if this person were being completely honest he would tell you that he wanted to basically split payment for your services 50/50, which is something you could have agreed to or walked away from. By getting you to lower your prices enough that he can double them, it seems at least a little dishonest. He isn't getting you to bring your prices down because the client wont pay them, but because he wanted to be able to make that extra money, but he seems to be trying to tell you that isn't the case and that clients won't pay your fee. In this case it sounds like he is your client, more than the bride and groom, and you should probably charge accordingly.

Of course there would still be negotiations, I am sure he wants to get paid for the work he is doing in finding and booking clients, but you may find it more satisfactory to bargain with him from the standpoint that your work is worth X amount to him as the client and what he charges on top of that is his business, not yours.

I have had to occasionally hire shooters to fill in for regular clients when I am unavailable to shoot, and while I may still make some profit from that as the person who got the gig, I never thought it would be appropriate to tell someone I will pay them half of what I would charge if I did the work myself.
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Old May 6th, 2008, 11:48 AM   #5
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Um, my initial reaction would be "get up, take off the shirt that says 'welcome' on the back and address this guy".

He's taking a 100% plus markup (AND the "backend"?!?!?) while basically devaluing your work? I understand you have some "relational issues" here, but if it were me, I'd take your assets (which apparently include a good photog), ratchet up your business and keep the extra profits for yourself. Remember you can undercut this guy going direct by 30-40% and still "beat" his prices <wink>. People will take advantage of you if you let them (been there, done that, got the shirt with the tread marks), and you've really described someone who isn't being fair.

You say you'll "lose" the other jobs?? What's this guy going to do? Hire a high school student with a handycam?

Realistically, you probably need to sit down and evaluate what IS fair to both of you, then show him the "new deal", make it reasonable and "sell" it, and unless the guys just insanely greedy (and some people are), he should realize that 15% markup is better than nothing to markup at all (sure it's not 100%, but c'mon!). If not, competition is fair game, and fair is fair.

If you're dealing with someone who will "cut off his nose to spite his face", better to part sooner than later anyway, but maybe you can work things out if everyone is reasonable - careful though, since I can tell you're already a bit peeved (understandably so).

Good luck with this, but I think you've got more opportunity here than anything else!
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Old May 6th, 2008, 10:13 PM   #6
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Quote:
Originally Posted by Chris Burgess View Post
So, here is my question;

By nature my background is not wedding/corporate work, but it does help to supplement income from time to time. I have been basically doing contract
...SNIP THE MIDDLE OF THE POST OUT...
of the jobs I have for the rest of the year through this person, as he will not be honest about what he pulls from my jobs) or take my lumps?

Oh boy are you NOT gonna like my response to this, so prepare yourself.

You're wrong. He's right.

The hardest thing to understand in business is that people simply do NOT get paid relative to the amount of work or effort they put in.

The janitorial staff in the building work inarguably harder than the CEO. And make a tiny fraction of what he or she does.

In nearly ALL forms of business in a capitalist system, people get paid, not based on how hard they work, or even the reltative importance of their efforts in the overall scheme of things - they get paid based on taking RESPONSIBILITY for GENERATING financial results. Period.

If the photographer is going out and generating the leads and the contracts - that's it. End of story. It's his or her call to determine how much to pay for subcontractors.

If you want control of the division of profits, the ONLY way you can rightfully do this is to take responsibility for generating your own leads and contracts. Simple as that.

So long as someone else is generating the contracts, the ONLY thing you can do is accept or reject their terms.

This is hard to understand when you're starting out. But it's the way business HAS ALWAYS worked.

So yes, it's TOTALLY fair of him to mark up your work 100%. Or 1000%. Or even 10,000%! It's fair because it's HIS risk. His job is to maximize his income (billings) and do his absolute best to control his costs (you.) That is and has ALWAYS been the central truth of all functioning business. I know it sounds harsh, but you've GOT to understand this if you want to do this for a living.

The business owner gets a LOT more than the workers, because the business owner takes responsibility for (and shoulders the RISK for) the ROI (return on investment.)

Business 101.

Sorry.
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Old May 6th, 2008, 10:30 PM   #7
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I am too new to video to answer that aspect, however, I have been involved in business my entire life
rule #1: buy low
Rule #2:sell high
did he lie to you? for him to get his desired profit margin, he needed your prices lower. he already had a videographer, so he only needed you if you were willing to work cheaper. He is worried about the bottom line, as any businessman should be.
now, in a more direct answer to your question. you bid a job, and agreed to work for set prices. If those prices are not high enough, raise your prices. he is doing all the marketing on the jobs he brings you. he makes all the arrangements, and takes a lot of the risk. he either spends money on advertising, or has a reputation that brings him business. if you had the business, you would not need him.
you can raise your rates, you can find other jobs that pay more. and frankly, if he is bringing you much needed business, then what is to question?
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Old May 7th, 2008, 09:36 AM   #8
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I know of someone who hit a similar situation

in the legal video field, only he didn't know he was earning so little in relation to the amount billed to the client. It, too, was half of what was being billed to the client. (He only learned of it AFTER a client unexpectedly showed him the bill in an effort to make payment). In the legal field, keeping between 15-25% is generally considered acceptable when sub-contracting to someone else.

Upon learning that, rather than take a fixed amount, he offered to do subsequent jobs for 70% of what was billed to the client.

I don't know the wedding field well; I seldom do them, maybe 2 a year, so I'm not speaking from experience and I have no idea how well such an arrangement might work. I suspect others here could join in w/their thoughts.

However, that's something for you to consider. If there are package deals involved, the amount billed to the client should be verifiable either through a web site or printed/published literature/material. However, I don't think he got any future jobs from the same guy after he made that decision.

Best of luck in deciding what to do.
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Old May 7th, 2008, 10:06 AM   #9
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Don't let him beat down your price. You have to make a living. Stick to your guns. If he wants to double that rate when he bills the client who cares, but don't lower your rate because of that.
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Old May 7th, 2008, 04:21 PM   #10
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Originally Posted by Bill Davis View Post
Oh boy are you NOT gonna like my response to this, so prepare yourself.

You're wrong. He's right.

The hardest thing to understand in business is that people simply do NOT get paid relative to the amount of work or effort they put in.

The janitorial staff in the building work inarguably harder than the CEO. And make a tiny fraction of what he or she does.

In nearly ALL forms of business in a capitalist system, people get paid, not based on how hard they work, or even the reltative importance of their efforts in the overall scheme of things - they get paid based on taking RESPONSIBILITY for GENERATING financial results. Period.

If the photographer is going out and generating the leads and the contracts - that's it. End of story. It's his or her call to determine how much to pay for subcontractors.

If you want control of the division of profits, the ONLY way you can rightfully do this is to take responsibility for generating your own leads and contracts. Simple as that.

So long as someone else is generating the contracts, the ONLY thing you can do is accept or reject their terms.

This is hard to understand when you're starting out. But it's the way business HAS ALWAYS worked.

So yes, it's TOTALLY fair of him to mark up your work 100%. Or 1000%. Or even 10,000%! It's fair because it's HIS risk. His job is to maximize his income (billings) and do his absolute best to control his costs (you.) That is and has ALWAYS been the central truth of all functioning business. I know it sounds harsh, but you've GOT to understand this if you want to do this for a living.

The business owner gets a LOT more than the workers, because the business owner takes responsibility for (and shoulders the RISK for) the ROI (return on investment.)

Business 101.

Sorry.
nothing in there about business ethics huh? nice...

so, basically what you are saying is that we all need to get one over on as many people as we can in life to succeed?

you would be perfectly alright if the same thing happened to you?

Thanks everyone for the feedback...time to re-negotiate (with contracts) all of the pricing structures...
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Old May 7th, 2008, 07:56 PM   #11
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The only way to be involved in an ethical business is to run it yourself, and even then it's a challenge <wink>.

It sounds to me like you did the guy a favor and lowered your rates thinking it would make it so he could land the deal, but it really was just to pad his margin at your expense. I don't mind adjusting my rates when it "makes the deal", but if it's to pad someone else's pockets at my expense (and I've known a LOT of business owners with that mindset), I'll pass.

And you're taking a lot of business risk and potential lost opportunity at higher returns too, it's not just him! That one job you described certainly reflects THAT, and the risk wasn't because of the client there...

Chris, you really need to evaluate what the plusses and minuses are - this guy won't likely change his ways, so you'll lose the future business, BUT I think YOUR business opportunities are wide open here if you're willing to bump up your business a notch or two.

I've never regretted parting ways with someone who worships the $$ over "the golden rule"... sooner than later is better IMO. Don't know the whole sitch, but that's my take after reading "your side" of the story.
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Old May 7th, 2008, 08:42 PM   #12
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Bill Davis is right. It's basic business. He's going to pay you as little as he can, and charge the client as much as he can in order to maximize his profits. You're not his partner, you're a freelancer, so what do "ethics" have to do with it? It would be unethical for him to not pay you or something, but you're just complaining about his negotiation style.

Sounds to me like he did his best to lower your rate, and you caved.

You can either figure out a price that works for you, tell him what it is and don't lower it. Or you can go out and get the contracts yourself. More work, but you keep it all. Sounds like you don't want to work with him anyway...
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Old May 8th, 2008, 03:07 AM   #13
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nothing in there about business ethics huh? nice...

[QUOTE so, basically what you are saying is that we all need to get one over on as many people as we can in life to succeed?
Nope. Not "nice" at all. But here's a secret, Chris. NO business you personally count on to feed, dress, protect, educate, or entertain yourself can SURVIVE by being the kind of "nice" you're talking about.

Looked at your way, every restaurant on the PLANET is totally "un-ethical." They're likely selling every customer a penny's worth of sugar water (soda) for at LEAST a buck - or 100 TIMES it's intrinsic value!!!

And you accept that (over, and over, and over.)

And because you (and millions of other people) do that, all those restaurants are there waiting when you get hungry. Because they can make a profit.

You "succeed" by figuring out where there's a market for your services. Then offering and pricing those services in a fashion that A) the market will accept - and that B) provides you with enough profit to grow your business successfully while taking enough profit out of it to survive in the early days.

Then and as you operate your enterprise over time, you may be lucky enough to take out enough profits so that you can live the life you choose to. That might mean simply supporting yourself and your hobbies, or it might mean a big house full of a family with spouses, kids, cars, college educations, and luxuries and enough money in the bank to provide for a comfortable retirement.

And I'm sorry, but NOBODY can do that by taking in $2000 for a wedding photo/video package - and giving YOU half of it. It just CAN'T BE DONE.

I've been self-employed for more than 30 years and I'd LAUGH at that business plan. Back when I was doing that kind of thing, here would have been my thinking on business costs.

First I'd know that out of a $2k job - up to a third of that needs to be set aside for taxes. Another third I'd plan to keep for profit and general business overhead. And the final third (more or less) should pay for ALL the expenses associated with the endeveor, INCLUDING my subcontractors.

I'd MAYBE consider paying $400 to a primary sub in a situation like that. But I'd sure look for cheaper vendors because that represents 20 freeking PERCENT of my gross off the top.

Quote:
you would be perfectly alright if the same thing happened to you?
What on earth makes you think it hasn't???

Throughout my early career while I was learning my craft and working for others, and making THEM more money than I ever got off my efforts, I took my paycheck like everyone else. And I had the same choices you're pissed off about now. If I didn't think they were compensating me properly I had 3 choices. Ask for more. Quit and work with someone else. Or shut up and take the deal. Welcome to "grown up" life.

Good luck. Honestly. I hope the low grade tone of "entitlement" that I perceived in your original post was something I'm wrong about.

But really, I've seen WAY too many people who don't take real responsibility for generating any kind of financial results and who are unwilling to take any RISK about what they're making - but still demand a big share of an enterprises financial rewards.

The only people in society that can do that are generally those with unique and specialized talents that are in very high demand. (athletes, actors,etc)

And I'm sorry dude, but if you're talking about making general purpose event videos - you shouldn't EVER forget that there are MILLIONS of people with camcorders and more than a MILLION full-price paying, officially registered users of just ONE popular $1200 video editing software package out there.

So I don't care HOW good you are, and HOW much effort you put in. You're in a bit of a commodity business.

So good luck with the "Mr Photographer - give me a big chunk of the money you're out on the street hustling up or I won't play with you" idea.

Let us know how it works out for you.
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Old May 8th, 2008, 06:28 AM   #14
 
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Like it or not, Bill's right.

My advice would be cut your losses and move on. Don't waste your time, or the photographer's, by arguing. Nothing will change. You won't get any more money from him. Move on.

You've experienced a valuable lesson. The questions are: Have you learned anything from it? What are you going to do now? Are you going to let others use your talents and profit from them, or are you going to use your talents and profit from them?
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Old May 8th, 2008, 07:06 AM   #15
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Seems to me that a simple answer here is not to accept any such work as a subcontractor, but rather pay a modest referral fee and contract directly with the client yourself. This other fellow isn't entitled to a 100% markup just because 'that's the way capitalism works', but if you let him make that deal with you that's your decision.

It's sad to see people saying that business is all about putting one over on the next fellow rather than simply trying to make a fair profit. Maybe those are two sides of the same coin, but attitude does matter and the world could use a little gentility these days.
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