Updated Digital Download Pricing = Business Killer

FierroPhotoFierroPhoto Registered Users Posts: 3 Beginner grinner
edited October 20, 2012 in SmugMug Pro Sales Support
Hey fellow dgrinners,

Is anyone else frustrated with the new price structure for the digital downloads? I fully understand the need to add some processing fees for digital downloads, but the method they chose isn't really logical to me. I am an event photographer and shoot a lot of "photo booth" type events. Because these aren't portraits, a wedding, or a single paying customer I must price low and sell at volume to make a profit. Before, this worked for me. Now, with the new price structure I'm forced to take a 49% hit in my profits. 49%!!!!

Here's the breakdown:

Old pricing:
Sell a customer 5 photos as "Web Res" digital download for $0.99 ea.
SmugMug takes additional 15% of profits = $0.74
My Profit = $4.20

New Pricing:
Sell a customer 5 photos as "Web Res" digital download for $0.99 ea.
SmugMug takes $0.49 for "covers credit card fees and our world-famous customer support" = $2.45
SmugMug takes additional 15% of profits = $0.37
My profit = $2.13

Again, I understand the processing fees are necessary. But the approach is wrong. Let's look at a order of 50 photos (Not that atypical for me. Some of my event galleries have 450+ photos).

Sell a customer 50 photos as "Web Res" digital download for $0.99 ea.
SmugMug takes $0.49ea that "covers credit card fees and our world-famous customer support" = $24.50
SmugMug takes additional 15% of profits = $3.75
SmugMug Costs: $28.25

So, in my case I'm being charged $28.25 in processing/commission fees on $49.50 worth of sales!!! That's a 57% net rate. This makes absolutely no sense. What they need to do is charge either a flat percentage or a single fee per digital only transaction.

I simply can't continue like this. For me raising my price point isn't a real solution, because a $0.49 increase on a $0.99 item is more than the customer will absorb. Especially my repeat clients.

I'm not sure what to do. I love SmugMug's interface and customer support, but this just doesn't make sense.

-Brandon

Comments

  • rainforest1155rainforest1155 Registered Users Posts: 4,566 Major grins
    edited April 20, 2012
    Thanks for your feedback, Brandon. I passed it on to our team.
    Sebastian
    SmugMug Support Hero
  • pilotdavepilotdave Registered Users Posts: 785 Major grins
    edited April 20, 2012
    Hey fellow dgrinners,

    Is anyone else frustrated with the new price structure for the digital downloads? I fully understand the need to add some processing fees for digital downloads, but the method they chose isn't really logical to me. I am an event photographer and shoot a lot of "photo booth" type events. Because these aren't portraits, a wedding, or a single paying customer I must price low and sell at volume to make a profit. Before, this worked for me. Now, with the new price structure I'm forced to take a 49% hit in my profits. 49%!!!!

    Here's the breakdown:

    Old pricing:
    Sell a customer 5 photos as "Web Res" digital download for $0.99 ea.
    SmugMug takes additional 15% of profits = $0.74
    My Profit = $4.20

    New Pricing:
    Sell a customer 5 photos as "Web Res" digital download for $0.99 ea.
    SmugMug takes $0.49 for "covers credit card fees and our world-famous customer support" = $2.45
    SmugMug takes additional 15% of profits = $0.37
    My profit = $2.13

    Again, I understand the processing fees are necessary. But the approach is wrong. Let's look at a order of 50 photos (Not that atypical for me. Some of my event galleries have 450+ photos).

    Sell a customer 50 photos as "Web Res" digital download for $0.99 ea.
    SmugMug takes $0.49ea that "covers credit card fees and our world-famous customer support" = $24.50
    SmugMug takes additional 15% of profits = $3.75
    SmugMug Costs: $28.25

    So, in my case I'm being charged $28.25 in processing/commission fees on $49.50 worth of sales!!! That's a 57% net rate. This makes absolutely no sense. What they need to do is charge either a flat percentage or a single fee per digital only transaction.

    I simply can't continue like this. For me raising my price point isn't a real solution, because a $0.49 increase on a $0.99 item is more than the customer will absorb. Especially my repeat clients.

    I'm not sure what to do. I love SmugMug's interface and customer support, but this just doesn't make sense.

    -Brandon

    I agree. Most of my sales are low res digital downloads. Facebook is where photos end up these days. The new pricing has killed off my sales. And I don't buy smugmug's excuse. I can give away an unlimited number of free original size photos and hd videos. But selling them costs smugmug 50 cents? I doubt it. Yes, there are credit card fees but that's not adding up to 50 cents for a cheap sale. Bandwidth used? I'm paying for that already. It amounts to nothing for one sale compared to regular photo views.

    I came SO close to moving to zenfolio earlier this year. A few things changed my mind, but smugmug needs to stay competitive with pricing. And promised upgrades need to materialize.

    Dave
  • perronefordperroneford Registered Users Posts: 550 Major grins
    edited April 20, 2012
    I primarily do digital deliver on Photoshelter, and print sales here. However, I did sell some digital downloads here this week. I need to go back and have a closer look at those.

    This is a VERY interesting issue, and one that might frankly cause me to simply remove digital downloads from SmugMug altogether.

    My print sales have been flawless though. Just got a good size order in last night and I am STILL very pleased with both WHCC and Bay.
  • perronefordperroneford Registered Users Posts: 550 Major grins
    edited April 20, 2012
    Now that the system is back up, I went in and took a look. I do 4MP sales at $3 and original size for $10. So that's probably why I didn't notice the hit you do. My pricing is such that it's cheaper to buy a print from me than do a download. At least on the bottom end. I realize that won't work for everyone's business model.
  • Pure EnergyPure Energy Registered Users Posts: 180 Major grins
    edited April 20, 2012
    So, in my case I'm being charged $28.25 in processing/commission fees on $49.50 worth of sales!!! That's a 57% net rate. This makes absolutely no sense. What they need to do is charge either a flat percentage or a single fee per digital only transaction.

    I simply can't continue like this. For me raising my price point isn't a real solution, because a $0.49 increase on a $0.99 item is more than the customer will absorb. Especially my repeat clients.

    I'm not sure what to do. I love SmugMug's interface and customer support, but this just doesn't make sense.

    -Brandon

    Sounds like you have the same clients I used to cater to that would balk at me charging $1 per cherry-picked 4x6. It might take ten shots to get that one and they're still complaining? Move on. I did.

    Inflation is present in lots of places. I no longer buy Top Ramen now that it is no longer 10/$1 yet you don't see them returning to prices I like when they can still sell at 4/$1.

    You really might want to consider raising your prices and help bring photography some respect again. You're essentially giving away the negatives at $36 per roll of 36 shots, that is, if they buy every image and if you had been given free film with free processing. What am I missing here? Just how well do people do selling "web res" images added into the mix?

    Are people purchasing nearly all of your images as digital downloads? Are you selling multiple copies of the "web res?" Are people also simultaneously purchasing larger sized downloads on all of the same images? Or are people cherry-picking and rarely buying larger sized downloads? Are they buying the "web-res" image with a 4x6, 5x7, 8x10, etc. or can one notice some cherry-picking trends there as well?

    If I offer reasonable prices on 4x6's, 5x7s and 8x10s, I've been told people will buy the lowest denominator. Same thing for digital downloads, I presume. Is your pricing model for 4x6s and "web res" downloads helping you shoot events comfortably or are you out hustling like the person who wants to cut my front lawn? Even the neighborhood kids no longer want to hustle cutting lawns unless it was $40-$80 per month now. So, I see less hustling for them in regards to how they price things. Why not less hustling for photographers too? Maybe we should encourage ... (nvm... I think I'll keep this thought to myself).

    In the meantime, don't get me wrong... SmugMug should consider only charging a processing fee for an order and take it's normal cut which is similar to what PayPal does. But would this be a good precedent for all other items sold through SmugMug? It's much simpler for you to use it as a loss leader and help promote low prices all-around.
  • FierroPhotoFierroPhoto Registered Users Posts: 3 Beginner grinner
    edited April 20, 2012
    Sounds like you have the same clients I used to cater to that would balk at me charging $1 per cherry-picked 4x6. It might take ten shots to get that one and they're still complaining? Move on. I did.
    If you are taking 10 shots of each photo booth or event candid, you're doing it wrong.

    You really might want to consider raising your prices and help bring photography some respect again. You're essentially giving away the negatives at $36 per roll of 36 shots, that is, if they buy every image and if you had been given free film with free processing. What am I missing here? Just how well do people do selling "web res" images added into the mix?
    First, making a comparison to film is asinine. I would never shoot 800 photos on film at a event. Digital allows me to do so. Second, my "processing and film" is free with digital. So every digital photo I sell is pure profit. Third, I'm selling them a 640X480 res image. It's not even good enough for a wallet print, and is nothing like "giving away the negative".

    My "client" is generally a large group/organization. They pay me a flat rate shooting fee, plus I sell prints/downloads. Most of these photos from these events are of people being silly and or intoxicated. Fun to put on Facebook, useless to get an 8X10. So in this case, MOST of my clients don't really want anything more than a low-res cheap option.


    If I offer reasonable prices on 4x6's, 5x7s and 8x10s, I've been told people will buy the lowest denominator. Same thing for digital downloads, I presume. Is your pricing model for 4x6s and "web res" downloads helping you shoot events comfortably or are you out hustling like the person who wants to cut my front lawn? Even the neighborhood kids no longer want to hustle cutting lawns unless it was $40-$80 per month now. So, I see less hustling for them in regards to how they price things. Why not less hustling for photographers too? Maybe we should encourage ... (nvm... I think I'll keep this thought to myself).

    I'm glad you sell prints, but most of my clients for these events don't want prints. Crazy thought, but maybe different clients and photography genres have different business models and pricing structures. Am I hustling? Not at all. Am I giving away work? No. I can make more shooting in 3 hours than a lot of bad wedding photographers make in a day (with no stress or real effort). Regardless of my style or business plan, SmugMug's modified fee structure is simply flawed.
  • Pure EnergyPure Energy Registered Users Posts: 180 Major grins
    edited April 20, 2012
    If you are taking 10 shots of each photo booth or event candid, you're doing it wrong.
    Your type of shooting is not my area of expertise, but I'm talking about ten good shots worth showing and purchasing because they are different. For what I think you're doing, posting ten shots that are similar and hoping one gets purchased is fine.
    First, making a comparison to film is asinine. I would never shoot 800 photos on film at a event. Digital allows me to do so. Second, my "processing and film" is free with digital. So every digital photo I sell is pure profit. Third, I'm selling them a 640X480 res image. It's not even good enough for a wallet print, and is nothing like "giving away the negative".
    Not making a comparison to film is asinine. You might as well be a politician and say the past doesn't matter. History repeats itself so why bother studying the past. When I shot film I incurred the same costs per year as I now do shooting digital, mostly because of the switchover costs and the computer costs. I am being lean and mean this year but my cushion for not spending is rapidly eroding. Are you posting those 800 shots that you're shooting? How many are you posting and subsequently how many "web res" images do you sell?
    My "client" is generally a large group/organization. They pay me a flat rate shooting fee, plus I sell prints/downloads. Most of these photos from these events are of people being silly and or intoxicated. Fun to put on Facebook, useless to get an 8X10. So in this case, MOST of my clients don't really want anything more than a low-res cheap option.
    Sounds like you're set with what you do and just upset that SmugMug is taking more of your gravy. I'd be upset too if I was more dependent upon selling "web-res" images.
    Crazy thought, but maybe different clients and photography genres have different business models and pricing structures. Am I hustling? Not at all. Am I giving away work? No. I can make more shooting in 3 hours than a lot of bad wedding photographers make in a day (with no stress or real effort). Regardless of my style or business plan, SmugMug's modified fee structure is simply flawed.
    Sounds good. I'm still curious as to how much sells of each various thing you offer per event.

    It does sound like an answer you seek is here: http://feedback.smugmug.com/forums/17723-smugmug/suggestions/2358269-why-is-smugmug-taking-a-cut-on-a-digital-download-#comments

    Maybe you should submit it differently as a new idea to start gathering more support for this change.
  • makco1makco1 Registered Users Posts: 2 Beginner grinner
    edited April 20, 2012
    I’m also looking for a workaround to offer Gallery Downloads that work “WITH” the way Smug Mug handles (.99 cent) GALLERY Digital Downloads and that will work with my customer needs.
    Next weekends 1 day event, I’ll have 300 contestants running in different 5 different obstacle courses, with each “run” lasting about 1 minute each.
    Very fast paced, indoor low light (no flash allowed), lucky to get a focus between the objects and I need to shoot 10 to 15 photos of each persons run…
    Most of these contestants want to see the FULL run from Start to Finish. And most are not real interested in buying the ($$ ) 1 great shot we might get of each run..
    So we need to be able to upload each contestants photos (10-15 photos) to its own sub-gallery then offer a Complete Gallery Package Price (4Mpix) and also offer single HI-Res photos at a higher price.
    Please feel free to tell me I’m crazy, and if you say these ideas will not work, then please help us design something that will!
    So far I've been happy with SmugMug and I’m willing to try working with what’s available until there is a better solution.

    Smug Mug Team question:
    Is there a way we can do a Batch Upload of photos to a Gallery / Sub Gallery ?
    Can we automate the process to Create a New Sub Gallery during uploads?
    Thanks
  • FierroPhotoFierroPhoto Registered Users Posts: 3 Beginner grinner
    edited April 20, 2012
    Sorry, my last response was bit harsher than I intended. I agree that we have different approaches. Thanks for the tip on submitting a new feedback suggestion.

    For anyone that agrees, you can vote for it at: http://feedback.smugmug.com/forums/17723-smugmug/suggestions/2786930-change-digital-download-pricing
  • TalkieTTalkieT Registered Users Posts: 491 Major grins
    edited April 29, 2012
    Wow... When did this pricing come in?

    Although I have a pro account I stopped selling prints a couple of years ago because of the lack of international currency support (and the clumsy solution recently implemented gives me no reason to reinstitute print sales through Smugmug)

    I was occasionally using SM for digital DL selling for large events but I have been running a really nice Paypal integration for 95% of my galleries and doing self fulfilment. This lets me accept payment in any currency and there's very little cut going to Smugmug.

    I have a world champs (Ultimate Frisbee) in July this year and thank goodness I noticed this thread pointing out the hugely increased fees for digital DLs... I'll definitely not be using SM for print or digital DL fulfilment anymore.

    All I can suggest is looking at an alternative payment processor and doing self fulfilment.

    I understand SM need to make a buck, and their support is certainly good enough to command a premium - but it seems in the OPs case like it's a pretty big increase in costs.

    Cheers - Neil G
    --
    http://www.nzsnaps.com (talkiet.smugmug.com)
  • SystemSystem Registered Users Posts: 8,186 moderator
    edited April 29, 2012
    The change to digital download pricing is precisely the reason I have not migrated to the new pricing model and never will. Oh, and SM's customer service doesn't deserve any premium. They suck and always will.
  • ian408ian408 Administrators Posts: 21,904 moderator
    edited April 30, 2012
    I'd like to remind you that this is a support matter involving pricing. If you have something to add about pricing, feel free.
    Otherwise, please refrain from posting in this thread.

    Edit: I've removed the posts that are irrelevant to the thread.
    Moderator Journeys/Sports/Big Picture :: Need some help with dgrin?
  • du8diedu8die Registered Users Posts: 358 Major grins
    edited May 2, 2012
    Here's the rub for me...
    Digital Downloads will have a minimum cost: $.49 for individual photos and $.99 for gallery downloads. This covers credit card fees and our world-famous customer support. (http://help.smugmug.com/customer/portal/articles/93345-price-and-sell-your-photos)

    "This covers credit card fees and support." This line would lead me to believe that digital downloads will cost $.49 for individual photos, and $.99 for galleries - NOT (price - $.49) * 15%.
    "Our 15% covers credit card processing, customer service and our bulletproof guarantee." (http://www.smugmug.com/pro/commerce/)

    So - I am paying for credit card processing AND customer service TWICE on Digital Downloads?

    I've been a customer for over four years now, and this is really the first time I've been disappointed with SmugMug. Not enough to leave - but enough to stop offering digital downloads. I don't mind paying for support and credit card fees. But - this double charging thing is not OK.
    H2 Photography - Blog - Facebook - Twitter

    Despite the high cost of living, it remains popular.

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    Canon 40d Gripped (x2), Rebel (Original), Canon 70-200 f/2.8 USM L, Canon 300 f/4, Tamron 28-75 f/2.8, Canon 50mm f/1.8, Canon 17-55 f/3.5-5.6, ThinkTank Airport TakeOff
  • Pure EnergyPure Energy Registered Users Posts: 180 Major grins
    edited May 2, 2012
    du8die wrote: »
    Here's the rub for me...
    Digital Downloads will have a minimum cost: $.49 for individual photos and $.99 for gallery downloads. This covers credit card fees and our world-famous customer support. (http://help.smugmug.com/customer/por...ll-your-photos)
    "This covers credit card fees and support." This line would lead me to believe that digital downloads will cost $.49 for individual photos, and $.99 for galleries - NOT (price - $.49) * 15%.
    "Our 15% covers credit card processing, customer service and our bulletproof guarantee." (http://www.smugmug.com/pro/commerce/)
    So - I am paying for credit card processing AND customer service TWICE on Digital Downloads?

    I've been a customer for over four years now, and this is really the first time I've been disappointed with SmugMug. Not enough to leave - but enough to stop offering digital downloads. I don't mind paying for support and credit card fees. But - this double charging thing is not OK.

    Ya, it really doesn't look right if one really thinks about it. I hate to suggest it, but it should start to look more like eBAy and PayPal.

    When I sell a music cd I got for free @ 5.99
    • eBay Final Value Fee $0.54
    • PayPal Transaction Fee $0.30
    • PayPal Processing Fee $0.17
    • USPS Shipping $1.98
    All these costs are really annoying considering I'd break even on the cds I bought at $3.00.

    In regards to the SmugMug digital download pricing. I'm fine with them charging something so get over with it. However, if someone buys more than one image... are they sent one email per image? or is it just one email?

    If it's just one email per order then there really should be just one transaction fee like PayPal. Simpler yet, if the customer is paying once there should only be one transaction fee.

    SmugMug Download Pricing should be:
    • Transaction Fee $0.49 for 1+ images (or $0.99 for a whole gallery download + any extra images)
    • Processing Fee 15%
    I almost don't even see the need for a different gallery download price. Maybe that should be $0.49 as well.

    I'd support a lower processing fee but with a lot of photographers & customers saying boo to print orders online versus digital copies... how do you expect SmugMug to stay in business and invest in improving its products without raising prices elsewhere?

    On the other hand, I think SmugMug already knows that they need (or want) a percentage so they won't be doing Download Pricing that could be more in favor of the photographer:
    • Transaction Fee $0.49 per order
    • Processing Fee $0.15 per image
  • DotaDota Registered Users Posts: 258 Major grins
    edited July 22, 2012
    Is there any update from Smugmug on this? The more I looked at it, the more I thought about it also. If the cheapest base price for a print is $0.19 (EZ Print) why wouldn't it be the same for a digital? The processing cost would be the same for both, would it not?
  • mbellotmbellot Registered Users Posts: 465 Major grins
    edited July 23, 2012
    Dota wrote: »
    Is there any update from Smugmug on this? The more I looked at it, the more I thought about it also. If the cheapest base price for a print is $0.19 (EZ Print) why wouldn't it be the same for a digital? The processing cost would be the same for both, would it not?

    Actually the digital download cost should be LOWER, since SM doesn't have to transfer the order to a third party (EZPrints, Bay or Loxley) for fulfillment.
  • Cougar548Cougar548 Registered Users Posts: 179 Major grins
    edited August 20, 2012
    I'm bumping this back up to see if we can hear something from SmugMug. I just sold $200 of digital downloads but lost almost $35 in "processing" charges. Really? This almost makes me want to find a different way for people to pay me....
  • bwgbwg Registered Users, Retired Mod Posts: 2,119 SmugMug Employee
    edited August 22, 2012
    we will have something very shortly that addresses the download pricing. thanks for being patient.
    Pedal faster
  • SheafSheaf Registered Users, SmugMug Product Team Posts: 775 SmugMug Employee
    edited August 27, 2012
    bwg wrote: »
    we will have something very shortly that addresses the download pricing. thanks for being patient.

    To expand on this, we are close to doing a small change that I hope will make just about everyone happy. Before pricelists, we had an abundance of $0.01 orders as Pros distributed digital downloads through the cart. Unfortunately, credit card processing fees made that a losing proposition for us, combined with the cost of creation, storage and delivery of the zip files.

    The change, which is in testing now, makes the base cost of single digital downloads $0.01. But when the subtotal of a shopping cart is less than $10 and includes a digital download, we'll charge a $0.50 processing fee.

    So if you price a digital download at $1.01, you'll get $0.85 profit. Make sense?
    SmugMug Product Manager
  • jh4wvujh4wvu Registered Users Posts: 169 Major grins
    edited August 29, 2012
    It would also be nice to be have the ability to add downloads to packages. I would like to create a package where the customer would get a free (or heavily discounted) digital download if they order a print.

    Chris
  • bwgbwg Registered Users, Retired Mod Posts: 2,119 SmugMug Employee
    edited August 31, 2012
    New digital-download pricing is live. Check out the details here http://news.smugmug.com/2012/08/30/a-penny-for-your-downloads/
    Pedal faster
  • ReuelReuel Registered Users Posts: 12 Big grins
    edited August 31, 2012
    I, too, would like to offer digital downloads as a "perk" for buying prints. Is there a way to put digital downloads in a package with prints, or offer a coupon that's only good for a download of a photo when a print of that photo has been purchased?
  • lifeinfocuslifeinfocus Registered Users Posts: 1,461 Major grins
    edited August 31, 2012
    Reuel wrote: »
    I, too, would like to offer digital downloads as a "perk" for buying prints. Is there a way to put digital downloads in a package with prints, or offer a coupon that's only good for a download of a photo when a print of that photo has been purchased?

    Oh, that is a good question. I hope it gets answered.

    Phil
    http://www.PhilsImaging.com
    "You don't take a photograph, you make it." ~Ansel Adams
    Phil
  • rainforest1155rainforest1155 Registered Users Posts: 4,566 Major grins
    edited August 31, 2012
    Reuel wrote: »
    I, too, would like to offer digital downloads as a "perk" for buying prints. Is there a way to put digital downloads in a package with prints, or offer a coupon that's only good for a download of a photo when a print of that photo has been purchased?
    That's not possible at this point. Packages can't contain download products and coupons can't be limited to specific products. Sorry.

    You could only create a separate gallery where you only offer downloads and could upload the photos again to that gallery. Then you could limit a coupon to that download only gallery.
    I wish there'd be an easier way, but right now there's no other option that I'm aware of.
    Sebastian
    SmugMug Support Hero
  • ReuelReuel Registered Users Posts: 12 Big grins
    edited August 31, 2012
    That's what I thought. Please add something like this to your list. Preferably before Christmas :-)
  • jh4wvujh4wvu Registered Users Posts: 169 Major grins
    edited September 1, 2012
    The ability to add digital downloads to packages as well as limiting coupons to specific products is on my list of features that will need to be implemented if Smugmug wants me to renew at the higher rate.

    Just saying!
  • jchinjchin Registered Users Posts: 713 Major grins
    edited October 20, 2012
    A little confused. So, if say we sell 11 digital downloads at $1 each, totaling to $11. What is the net fees to Smugmug? What is my net profit?

    As I read from the blog page, if the order is less than $10 of digital downloads, the Smugmug fees are $0.50. What about when it is over $10?
    Johnny J. Chin ~ J. Chin Photography
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    SmugMug referral coupon code: ix3uDyfBU6xXs
    (use this for a discount off your SmugMug subscription)
  • rainforest1155rainforest1155 Registered Users Posts: 4,566 Major grins
    edited October 20, 2012
    jchin wrote: »
    A little confused. So, if say we sell 11 digital downloads at $1 each, totaling to $11. What is the net fees to Smugmug? What is my net profit?

    As I read from the blog page, if the order is less than $10 of digital downloads, the Smugmug fees are $0.50. What about when it is over $10?
    Base cost of each download is $.01 so as with any prints, the base cost is taken off before doing any profit calculation.
    That leaves a profit of $10.89 of which you'll get 85%
    = $9.26

    Note that the $0.50 fee doesn't concern you - it would be charged to the customer if their order contains at least one download and their subtotal is below $10.
    Sebastian
    SmugMug Support Hero
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