Derek recently asked this question:
I saw an ad on craigslist for this site (intentionally omited) that hires freelance contractors to photograph properties for pennies (10 exterior photos for $15, 3 exterior photos for $9). I see that their target audience is banks and others who have REO properties, but was curious if this happens in other areas of real estate? If so, are Realtors using this as a base to gauge competitive prices?
Yes, to varying degrees this kind low-ball pricing goes on throughout the real estate photography business. It's a fact of life! These kinds of operations are in very market. Just yesterday, I saw a national company offering 30 HDR photos for $69. And this is the price the company collects from the Realtor client. The photographer typically gets around $30 and there's someone doing the post-processing that gets a few dollars too. If the participants did the arithmetic they'd realize only the national company is making money because they doing this pricing on a massive scale.
Yes, to varying degrees these operations affect what Realtors expect to pay. Moreover, these companies are not going away anytime soon. They exist because there are people out there that are willing to participate. Given that they are a fact of life, how do you deal with this kind of pricing?
- Understand your expenses: Carefully track your expenses and clearly understand what it costs you to show up and do a shoot. Many people doing these cheap shoots are not making money! So before you reduce your prices or sign up for any contract shooting understand the arithmetic clearly.
- Understand your competition: Know specifically what you are competing against and figure out what you need to do to be better than the competition. This could be additional add-on products or just the way you do things. This will take some research, but it is well worth the effort.
- Know your market: All markets are not the same. After spending most of my life in Seattle where great real estate photography is expected and the norm I moved back to the sleepy little town where I grew up (Salem, OR). The market for real estate photography here in Salem is very different than Seattle. Very few agents use it and an upper-end home is $500K.
- Make better photos: If your work is significanly better than the cheap guys, you create a class of work that doesn't even compete with them. Scott's analogy in his comment below is that Mario Batali doesn't compete with Mickey D's because his food is in a completely different class.
- Provide great customer service: Customer service is a huge factor to clients and most of those companies that do cheap photography have poor customer service. Good customer service could be being easily available, delivering fast, being flexible and easy to work with. Find out what customer service means to your clients and do it well.
- Do great marketing: Make sure potential clients know why they should hire you over the cheap guys. This means dedicating a website to explaining and promoting your products and services. Simply and clearly explain your services and give examples. Then, use the website to do targeted marketing to people that are potential clients.
These days market forces are pressing everyone to be more efficient and deliver more for less. But there are more ways to compete in the real estate photography business than price. Find a better way to compete than just reducing your price. The fact is there is plenty of successful real estate photography businesses charging far above these cut-rate prices. Here are just a couple of examples here and here.