Micro-Managing Your Stock Portfolio, Part VI

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May 28, 2014 at 10:30 am  •  Posted in Inspiration, Tips & Techniques by  •  0 Comments

The successful stock photographers know the key to success is in generating working images that will be licensed time and again, with a total disregard to “Likes” and “Credits.”

The successful stock photographers know the key to success is generating working images that will be licensed time and again, with a total disregard to “Likes” and “Credits.”

Over the five past installments of learning how to think like a stock photographer, I have provided most all of the basics that I have learned from more than 20 years’ experience. It is now time to go back and revisit the post that started the discussion: It’s Time for Photographers to Go Indie. 

With the information you have been provided, you should now be armed with sufficient knowledge to decide whether your photographic interests and style even loan themselves to producing working imagery that will license and, ultimately, make you money. Furthermore, from your research, you should have learned the differences between micro-stock, royalty-free and rights-managed licensing models.

Now you have some decisions to make: If stock photography is a vocation you want to pursue, how do you best position yourself in order to earn a living at your craft? Can you pump out the sheer volume that micro-stock requires in order to potentially generate the sales volume its low net economic return makes necessary in order to keep your business afloat? Or, does your style and skill favour producing rights-managed material so your investment of time might be better rewarded?

If you are considering the traditional model of giving your images to an agency, you should have also reviewed the various pricing structures of each licensing model with respective agencies. This should be done before you even study their contracts.  For example, the high-dollar value of one micro-stock agency could be $2.50 (purchased through customer credits), whereas the high value of another is $65.25. So, which is better? Does the lower purchase price translate to more sales, and consequently put more money in your pocket? This is where the speculation begins, and it is very much a crap shoot.

At the same time, you should be endeavouring to forecast how many images you might have to create in order to earn an income sufficient to support your lifestyle. Many aspiring photographers don’t do this most basic exercise, along with calculating all the associated costs of running their business, and then they are astounded when the fiscal year-end realizes insufficient funds to even purchase a new lens, let alone pay the rent and put groceries on the table.

A quick table, using very loose sale averages, might appear something as this:

Licensing Model

Micro-Stock (low) Micro-Stock (high) Royalty-Free (high) Rights-Managed

License Price

$2.50

$65.25 / $10.00*

$609.00 /$100.00**

$250***

Photographer %

20%

20%

20%

40%

Photographer net

$.50

$13.05 /$2.00

$121.80 / $20.00

$100

No. of image sales to earn $75,000

150,000

5,747 / 37,500

616 / 3,750

750

* Value is the highest available from one agency; expect average sale price to be less than $10.00.

** Value is the highest available from one agency, expect average sale price to be less than $100.00.

*** Value is industry average per image sale. Can be much higher and into the tens-of-thousands, or lower.

From this table, several assumptions can immediately be made. However,  the annual revenue from stock sales of $75,000 does not translate to an income of the same amount. Like many business, you should endeavour to realize a personal income in the amount of 30% of gross revenue. Therefore, realizing annual revenues of $75,000 you should expect an annual personal income in the vicinity of $22,500. As a result, from the table above we can extrapolate that should we decide to shoot for a micro-stock agency, we will have to produce enough material to realize 150,000 sales transactions per year to earn a couple of thousand dollars per month!   

Or, you could consider going Indie…and retain 100% of the sales dollar value. The rewards are greater, but so are the risks. We’ll review some of those considerations in our next post.

In the meantime: Get to work producing working images.

Micro-Managing Your Stock Portfolio, Part I
Micro-Managing Your Stock Portfolio, Part II
Micro-Managing Your Stock Portfolio, Part III
Micro-Managing Your Stock Portfolio, Part IV
Micro-Managing Your Stock Portfolio, Part V

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