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?

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.

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.

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!

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.

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?

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.

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.

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...

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.

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...

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.

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.

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?

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.

Bill,

In general, I agree with what you wrote. Price is driven by demand and supply, and if shooters agree to work for next to nothing, then that's just what they'll get. However, with regard to this:
Sounds quite reasonable for a job that my company is actively involved in. Such as, if my company were to take part of all the production legalities, logistics, insurance, etc., and then hire subcontractors to do the shooting, sound recording, editing etc., that sounds alright to me. But for a simple referal, where I do absolutely nothing other than take a DVD from one person and give it to somebody else, personally I'd feel horrible about adding a 100% markup.

I guess there is a reason why I can't afford the kind of luxory life that you outlined in your post. But at least I can sleep well at night, and I feel good about what I do.

- Martin

The world could use a lot of things these days, but some people are saying "business is all about putting one over on the next fellow" because in reality that's exactly what happens sometimes. Bill Davis has done a good job of pointing out just how oxymoronic "business ethics" can be -- these are mutually exclusive terms for many people. What should be and what is are often two entirely different things, and this is about what *is,* as ugly as that may be, and how Chris Burgess can best deal with it.

There has been some excellent advice in this thread. I think Chris should be ultimately prepared to go into direct competition against this photographer for the wedding video work in his market. And he's already married to a photographer, so perhaps he and his wife can take on the photography business as well. But in terms of "what's right" with his current arrangement, "what's right" is what he settles for. If I were in his shoes, I'd ask for at least 75% of the final cost to the photographer's customers, and I'd be fully prepared to start my own business and go into competition against that photographer if his answer is no.

Wow, my thread rates a post by Chris Hurd...nice!

Bill, I see exactly what you are saying, I just don't agree with it, thats all. I would appreciate it if could keep your perceptions to yourself however, as they are way off base and really a perception over the internet is equivalent to a blind person describing what a flower 300 feet away looks like at that moment.

I think this thread proves one thing for sure, there is no "hard and fast" way to handle anything relating to independent video, etc.

I really like the few references to taking a percentage of the final sale, but that relies on the other person being 100% truthful about their final invoice, and according to the "swim with sharks" people, that is an impossible thing to do.

Competition is up in the air at this point, but i do agree it is not worth arguing with the gentleman about the past, So we will see what happens.

Again, thanks to everyone for all of the responses, even Bill, as it is a very real aspect that he presents to the argument.

Martin,

If that's what's actually happening - one guy takes a disc and delivers it to another - than I totally agree with you.

But that wasn't my reading of the OPs situation.

I thought that the OP was hired by someone as a subcontractor after that initial person had developed the lead and then negotiated and entered into a business agreement with the customer.

Only at that point, did they seek out the OP as a sub to do a part of the work.

And I say a PART of the work, because I believe that the very act of FINDING the client and negotiating the business agreement is the probably the single MOST valuable part of the deal.

THAT is what drives busineses. Plain and simple.

Without the paying client - there IS no business.

So whoever takes responsibility for securing THAT part of the equation will typically control a lot of the transaction.

Simple fact of business life.

Sure, Bill, but the original poster is still being ripped off, and the photographer has been caught lying to him in order to increase his own profits. That kind of stuff happens, but it doesn't mean that Chris has to accept it happening to him.

Chris, get out of this arrangement if you can't negotiate for a much greater percentage. Granted, it may take you some time to build up enough contacts, etc. to compete on the same level as your photographer "friend," but think of it this way: with the cut he's taking out of what the clients are paying for the video, you'd only need to do half as many jobs on your own to make the same amount of money. :)

Chris,

First, I was probably a bit harsh. Sorry, but understand that this comes after 30 years of self employment making videos. And looking back over that history, what I wrote for you is what I WISH someone had wrote for ME back when I was getting started.

It could have perhaps made my first decade a lot easier when I worked my butt off and barely had any money left over to support my family at the end of each month.

Eventually I got smarter. I realized that there's nothing wrong with running a profitable business. And the fact that the VAST majority of new businesses FAIL in the first 3 years shows that running a profitable enterprise is a LOT harder than most people think.

I believe the actual truth is that if your prices are out of line, OR if you're trying to pay what are ACTUALLY sub-standard wages or professional fees, the market will tell you that pretty quickly.

I believe you ran up against that. A vendor who felt they couldn't participate with you at the level you required. Typical business circumstance.

The hard thing, I believe you'll soon discover is finding REPLACEMENT clients who CAN pay what you feel is proper.

So I hope your way turns out successfully for you.

But for me, until I learned to pay attention to margin and profit and all the other business stuff that fill VOLUMES in the local library - it just didn't work.

Honestly, good luck and let us know how things work out.

Oh, and if I might add one more useful thought. Be wary of that idea that "there is no "hard and fast" way to handle anything relating to independent video, etc."

That's essentially saying that all the writing about basic business concepts developed over the generations are all wrong.

The truth is that business is still business. And learning about how it REALLY works is actually a pretty darn good way to increase your odds that you'll get to keep doing what you obviously enjoy - AND actually make a decent living doing it.

FWIW.

Jarrod,

Yeah, he probably IS being ripped off. (Hard to say because we're only getting one side of the story. For all we know the invoice he peaked at was generated after 52 meetings over four months with an obsessive mother of the bride who richly deserved a big fat "hassle tax" But let's call the story EXACTLY as he relates it.

My contention is STILL that the single MOST important part of any business effort will always be SALES. Period. End of story.

And if the photograher is successfully doing that job, it's his money flow to control as he sees fit.

I'm not saying that it's in ANY WAY fair. I'm saying it's REALISTIC.

If you're DOWN STREAM - the water that reaches you always will be a function of the desires of the guy who owns the dam upstream.

Ces't la vie.

Bill, sure. It is entirely fair for the person who makes the sale to take a reasonable cut of a subcontractor's fee, but 50% of the total paid by the customer is not reasonable. Sure, this photog's just trying to make a profit. The thing is, though, Chris could very easily decide to let him make his 50% sales fee off of some other poor schmuck. There's absolutely no reason for Chris not to do that, since he could go out and make the same amount of money he makes now even if going it alone meant a huge drop in the amount of work he's able to get.

In other words, there's nothing any more "wrong" about what the photog's doing (except the lying and concealment bits) than what McDonald's does when they charge $1.50 for sweetened water... but at the same time, the beauty of capitalism is that you have a choice, and if Chris chooses to continue paying a 50% sales fee, I think that's a very bad choice. 15%, 20%, OK. 50%? Crazy.

Not to mention the fact that this guy seems to have forced Chris into this 50% arrangement by not telling him he was taking that big of a cut. I'm sorry, but that's just shady.

FWIW, and this may not apply, several years I had shot some footage here in the Everglades of alligators mating. At the time I was working with a producer on a nature doc. I was told that up to that point, no one had ever captured that on video. Whether or not that was true, I have no idea, but it sure sounded nice at the time (as of today this certainly isn't the case).

Anyway, some time after that I was contacted by the producer (she never paid me for my weeks of work on the defunct doc) saying that someone in NYC was very interested in licensing my footage. Great!

However, I was told that the person in NYC would take 50% of the total fee and the producer (who never paid me, remember) wanted 25% for turning the NYC connection onto my footage. That left me with a measly 25% for "one-of-a-kind" footage! I don't think so.

Long story short, I told her, politely, to go fish. Why? Because to me it was a matter of principle. In my mind--right or wrong--I'd rather not make one red cent as opposed to being taken advantage of. She didn't see that way, and she was hot.

It all boils down to a matter of choice. I chose to pass.

Well, you're not going to like what I'm about to tell you at all. I have known Bill Davis (online) since I first started posting to Usenet back in the '90's, and on a face-to-face basis since the days long before I ever had the idea for DV Info Net, back when I moderated message boards for Canopus. Just a couple of weeks ago in Las Vegas, I plied him with copious amounts of alcoholic girly-drinks, pretty much begging him to take a moderator position here. So if I have anything to do with it, hopefully we're all going to hear a lot more about Bill's perceptions, because the value of this man is that he's been there, done that, and worn out several T-shirts, and he'd rather tell you like it is instead of what you want to hear, because telling you like it *is* is what really helps you. Bill Davis is incredibly generous with his knowledge and expertise, and he has climbed the ladder that a lot of us are stumbling on. I view his presence here and his perceptions as invaluable and I'll do whatever I can to persuade him to post more.

As always, Bill: thank you, thank you, thank you.

If there's any real degree of usefulness to this site, it's in telling it like it is, and then figuring out how to turn a bad situation around. We can talk about "what should be" and how the world would be a better place, etc., but that doesn't accomplish anything. Recognize a situation, call it what it is, and then turn it around. That's what this is all about.

Turning this situation around for Chris Burgess is going to involve getting himself upstream -- either by some firm renegotiation or by going into business and competing directly.

I don't see what he did as getting over on you. You quoted him a rate you were willing to work for. He quoted his client a rate that he thought they would be willing to pay. Where does the one influence the other? If you wanted to bigger share of the pie, you should have stood firm on your original higher quote and been willing to walk away from the table if he didn't agree to it. You may be kicking yourself because you agreed to do so much work so cheap but that's hardly his fault.

"Keystoning" is not at all unusual in the retail consumer marketplace. You go to the jewelery store and buy your gal a $500 ring. It wouldn't be at all unusual for the store to have paid $250 for it from their wholesaler. How is this any different? You sold your services to him wholesale and he re-sold them retail. In the process he added value and assumed some risk, both of which translate to $$ for his pocket. For example, if the client had stiffed him you would have still been paid, right? Assuming that risk is worth money to compensate him.

(needless flattery snipped - tho greatly appreciated, copied, enlarged and decoupaged over my wife's vanity mirror and onto the inside of my son's backpack...; )

Chris H,

Nothing I'd enjoy more than feeling like I had the CONSISTENT time to commit to the board. It's a wonderful resource and I do greatly enjoy being here when I can.

Unfortunately, right now my clients, my family, and my volunteer obligations are all I can handle.

But that won't last forever.

Know that as soon as I feel I can commit to more - this is the first place I'll come.

Bill you are brutally correct.
Painful as it is for some to accept, when you slice & dice it, no one can dispute the facts.
Allen W

Nothing to add to the rate/ethics discussion here, and
 

I don't mean to hijack, (or embarrass Bill), but I do want to echo Chris and give Bill his props, though from the other end of the spectrum.
I had the chance to work with Bill on a single, 1-day shoot, having never met each other before it, except for a couple of phone calls. I also had the rather nervous pleasure (?) of watching him hover about 12-15 feet in the air, balancing on a shaky and broken wooden pallet lifted by a fork-lift, while using MY barely-used HVX and tripod during a day when thunderstorms were passing in/out all day. (I wish I had a photo of him doing it). Talk about a tense moment; one wrong step or shift of his weight, or unexpected thunderclap, and we could have lost Bill, the camera, or both. After wrapping, there was one brief but awkward moment where I learned a lesson from him that I've since tried to put into practice. That's led to turning down a few jobs, but I think it's opened up others. Bill, and his advice, came through in spades. I'd take whatever advice his experience provides, and would work with him again in a heartbeat. (And no, this isn't begging him for more work; it's more testimony to his business sense...at least my perception of it).

I'd have to admit that Bill (and his "entourage") are right HOWEVER a 100% markup is certainly excessive compensation for essentially asking "would you like fries with that?"

Yes, the other party is taking some risk by hiring you but I would argue that his mark-up is bordering on ridiculous. What is your recourse? If you aren't making enough money off the gig to satisfy your want or need, terminate the relationship. If you WERE happy with your compensation and only upset by the fact that this person is making money off you, you need to reconsider the line of work you are in.


Just my .02, folks.

I'm a video hobbyist, but have been in the business side of the computer biz for - a LOT of years. Let's just say a lot longer than Bill has been in the video business. A lot of my work has to do with being an OEM supplier to another company. In this arrangement we sell our product to them, they integrate it with some other stuff, and sell it to their customer under their name.

As Bill says, business is business. Cost is cost and price is price, and they have no relation to each other (although getting more for something than you pay for it is always recommended if you want to stay in business)

Frankly, as a vendor or subcontractor, the price at which someone resells your products or services is none of your business. As long as when they resell it they represent it as part of THEIR product or service.

It MAY be your business if they represent to their customers that they are a reseller of YOUR products or services.

In other words there are two main cases; whether the product or service is sold under and perceived by the ultimate buyer as the reseller's "branded product or service" or your "branded product or service"

I think there is a lot of confusion in people's minds between the two above cases, which drives the differing opinions.

"Let me make that perfectly clear", as a former President used to say.

1) If the customer came to the photographer because they had seen or heard of him, then they are buying the services of the photographer, not your services. Whether the photographer has the video done by you or his mother-in-law is of no importance whatsoever to the customer. From a business perspective, the customer doesn't know or care whether you exist or not - you're invisible. The transaction is between the photographer and the photographer's customer and you're the hired help and the business relationship between the photographer's customer and the photographer is flat out none of your concern. Your only concern is whether you get paid by the photographer or not.

2) If the customer came to the photographer because they knew that he was your representative or agent, then things would be different.

Assuming that case (1) is representative of the situation, then if you think you aren't getting paid enough for your services, ask for more money because you think your services are worth more money. If you just think you should get a bigger slice of the pie, keep in mind that the size of the pie is none of your business.

Absolutely right. Thanks for taking the time to make such a spot-on post, Jim.

Chris Burgess,

I think this guy wants an employee without having to pay the overhead associated with employees. If fact, if you've been working with him on on projects on a regular basis for more than 90 days, there's a good chance that you would be considered his employee (if only a part-time one) for tax and other purposes and unless he's been doing the appropriate tax withholding, he's potentially in a heap of trouble.

BTW, if he asked you to do work and you did on his promise that he'd pay you most certainly did have a contract with him, albeit an oral contract that might prove difficult to enforce, but it is technically enforceable.

Chris B,

Charge your rates and walk away if they don't want to pay 'em.

Anybody who blatently asks you to lower your rates is trying to get something from you.

As contracted labor, you get to decide what your time and effort is worth.

If you feel like you need experience, then do the work and don't care about the money because you are gaining valuable lessons.

Either way, make a decision and go with it.

1) There's nothing magical about 90 days. I have a good client I've been working with for 15 years and the IRS certainly doesn't think I'm their employee. I know because I passed a major audit and this was never an issue. There are a lot of other considerations that come into play.

2) I don't think Chris ever said he didn't get paid, he's just unhappy with how much he gets paid for what he does. Or maybe he's only unhappy with how small a percentage of the total that he gets - not sure which.

3) Nearly every client I've worked for has asked me if I could work for less. Depending on the circumstances, the answer is either yes or no. I expect them to ask me this - in fact I'm sort of disappointed if they don't. After all, if they aren't trying to get the best deal possible with me, maybe they're not making good deals with the people they work for. In which case they may be out of business before I get paid.

And you can always negotiate to lower the scope of what you do if the price is too high for your prospective client. Less pay = less work. It's all negotiable.

Jim is right there are a lot of factors that come into play. How the IRS would treat this depends on the facts of the case. I should have been more clear.

The contractor v. employee issue is one that comes up frequently in the film and video production business and companies in the business face greater attention from the IRS about it. In 1994 the IRS changed the way it looks at certain classes of film and video employment relationships and created special rules for them. See the "IRS guidelines" section under Education and Information at http://www.itva.org/

This is such an important issue that some film/video employment companies provide the service of keeping production companies "honest" when hiring crew for projects. See: http://www.screenlightandgrip.com/html/crew.html

The facts Chris suggested are that the photographer finds the clients and then asks Chris to do the video. This means the photographer is telling Chris who his client is going to to be and where and when he must turn up to do the work -- all related to "control" of the work in time, place, and manner which is one of the principal factors the IRS looks at. It sounds to me like the photographer is setting his wage as well and the manner and form or payment. If the photographer does the creative meetings with his client as to look and feel of the finished product, as Chris implied that he may do, this would also suggest Chris is more like an employee. These are the reasons the situation sounds fishy to me, but admittedly it is a greyish area.

There is indeed nothing magical about 90 days, but it's the term that been quoted to me by attorneys of nonprofit clients that I've worked for who have questioned my employment status on various communication and web projects. Designing a website as a one-time project was fine. Updating the website on an ongoing basis gave the attys gas.

Peter

Thanks much for the link to the IRS document. I read the whole thing today.

My personal (ie non attorney) feeling after reading it is that if Chris owns his own camera and lights etc, buys tape etc out of whatever he gets for the job (ie doesn't ask for reimbursement for supplies), and otherwise acts like a separate business (ie, keeps appropriate records, invoices on his own letterhead, prepares a Profit and Loss report at tax time, pays the self employment tax, buys business insurance, takes out a local business license etc etc) and also is the one deciding on how to get the effects desired by the guy hiring him and the bride and groom, then he's on pretty solid ground to be recognized as an independent contractor.

Interestingly enough FedEx Ground seems to have been involved lately in a somewhat similar dust up over the use of "independent contractors" who own their own trucks, but paint them in FedEx dictated styles, wear FedEx uniforms, and carry nothing but FedEx packages and follow the FedEx routing instructions. Not sure how this is all progressing or whether there's been any conclusion, but it certainly highlights the issue.

Anyhow, thanks for the link. It was interesting reading.

OT: FedEx
 

I know one of these truckers actually. It is indeed a very odd arrangement.

I have had a similar situation happen to me. Halfway through last summer I was contacted by a 'wedding service' agency from out of state. They were wondering if I would be able to videotape occasional weddings for clients of their's that were being married in my town on 'destination weddings'. I said sure, and they would call me, give me specifics of the couple and where and when the wedding was to be shot and what they wanted. I'd quote them a price, and they would then present that to the client (with a good markup I'm sure) and then get back to me to let me know if the client 'could afford' it. If so, I'd shoot and edit it, send the DVD's to the 'wedding service' company....and they would forward the DVD on to the couple and I got a check for my agreed on price. I did four or five wedding in July, August, September this way....everything worked great except for once. I happened to be talking to one couple when I was shooting and as they were asking about my DVD's....I told them I sent every couple two DVD's and advised them to keep a 'master' locked away and only watch the other one. That way if one got scratched, they could make a new burn of the 'master copy' and lock it back up after making a copy. Well, I was contacted by them via email a couple weeks later. Seems the 'wedding service' company was keeping one of my DVD's and only sending 1 DVD to the clients....they figured that way THEY would have a copy if anything went wrong. No big deal, EXCEPT they had never told me they were doing this, as I would have sent 3 DVD's then as I want all my couples to have 2. Anyways, no big deal, we got it all sorted out.

Then, comes this summer. They call and asked me for a formal package sheet with prices and what is included before the wedding season. I email one off. They get back to me and mention that their ceremonies are usually only 30 minutes or so and everything else isn't very long either....in other words they want me to lower my prices. So I give them a special deal....only good for their clients as it is true that their weddings are easier and quicker to do (lowered my prices about 15% as it seemed fair compared to my usual wedding shoots). They call me back and once again want me to lower prices.....telling me it is only 'an hour and a half of work'. I explained to them that an hour and a half shooting, means I have to be there AT LEAST 45 minutes before that to set up, which means leaving my house to drive to their locations half an hour before that, which means, loading gear into my SUV half an hour before that, and also pack up and load up after the wedding, plus an hour and a half of ingest time into my computer (Yes, I'm still tape based)....and that is BEFORE ONE FRAME has been edited, which is where the majority of the time is. Not to mention, that if they book me for the day, I can't book any other full paying clients that day. Long story short, they tell me the clients 'can't afford' my prices and I need to lower them. I tell them that I 'can't afford' to lower my prices. They try to appeal to me again, and I finally told them if they really want the clients to be able to 'afford me' that I would suggest they lower their markup on my services. Of course they didn't want to do that! Anyways, they canceled my first scheduled shoot of one of their weddings this summer, and I have got nothing else from them since.

Moral: 'Be prepared to loose all the business you currently get from someone like this as they will likely be competing on price alone, and I am SURE they can usually find someone cheaper than you.

Anyways, I DON'T compete on price. As a magazine's business section has noted, "the only logical progression of competing on price is that you will eventually end up doing something for nothing". I choose to stick to my prices and if I loose the business, so be it. The business I loose, is not people I want to be working with anyways!! Maybe I am lucky here, I DO NOT base my video business on weddings. I try and be as diverse as possible, TV commercials, events, weddings, freelance news, web video, website creation, live web video broadcasts of events, documentaries, short corporate videos, pretty much ANYTHING relating to video and multimedia. Being diversified means you DO NOT have to depend on one segment of your video business to make you 'X amount', because if it's slow in weddings, you can make up for it making TV spots, or news coverage or something else. So be prepared to 'take it or leave it' when one of these people makes you an offer. As Bill says, they have the contacts and 'control the water upstream of you'. If you decide their price isn't fair (as I did) then be fully prepared to walk and loose all that business. It wasn't worth my time and effort for what they wanted to pay me. They can find someone else to do it, cause it's not going to be me, I've got enough other work that will pay me a fair rate to deal with.

As an interesting aside, I just got a email from a woman in Houston Texas, and another in Las Vegas asking me to shoot their destination weddings. It appears a popular Alaska wedding destination website put a link to my site up directing people to me if they needed video for their wedding. I didn't ask them to do this or anything, I'm not even sure which of the wedding vendors that I work with did this for me! Of course I am grateful and want to thank them, now I just need to find out which wedding planner it is! I will also cross link to them. They apparently think I offer a fair price for the product I put out and I am listed in their recommended vendors section. So you lose business some places, and gain it others.

First off, let me say that there has been a ton of helpful advice and knowledge thrown around in this thread. And to be perfectly honest, the initial response Bill Davis gave has been the one that stuck with me the most (thank you Bill).

First off, let me clear a few things up. Yes, I pay for all of my own supplies, maintain proper records as such and handle my business like a business.

Second, alot of my indignation originally came about because this person went out of their way to assure me they were me friends. To be taken advantage of by a "friend" was rather upsetting to me. Well, shame on me for sure. while I approached this from a "friends helping friends" point of view, it is now very obvious that the other party approached it soley from a business point of view. It was stated somewhere earlier that really what he wanted to charge was not my concern (which it is not) and that I should have just worried about myself.

Bearing this in mind I have built up a new price letter reflecting the prices that I feel are adequate and have sent it off to him, with no response yet. I do have the luxury in this position that this is not my primary work so losing some income from this will not hurt me in the long run.

I do hope my stumbling around in the dark and the responses that it has garnished will help others with similar problems. And now we wait to see what happens!