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Old Apr-20-2012, 05:46 AM
#1
FierroPhoto is offline FierroPhoto OP
Beginner grinner
FierroPhoto's Avatar
Updated Digital Download Pricing = Business Killer
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
Old Apr-20-2012, 06:39 AM
#2
rainforest1155 is offline rainforest1155
with a Heroes touch
rainforest1155's Avatar
Thanks for your feedback, Brandon. I passed it on to our team.
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Old Apr-20-2012, 07:37 AM
#3
pilotdave is offline pilotdave
Major grins
Quote:
Originally Posted by FierroPhoto View Post
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
Old Apr-20-2012, 07:45 AM
#4
perroneford is offline perroneford
Major grins
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.
Old Apr-20-2012, 08:46 AM
#5
perroneford is offline perroneford
Major grins
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.
Old Apr-20-2012, 09:26 AM
#6
Pure Energy is offline Pure Energy
Major grins
Quote:
Originally Posted by FierroPhoto View Post
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.
Old Apr-20-2012, 10:01 AM
#7
FierroPhoto is offline FierroPhoto OP
Beginner grinner
FierroPhoto's Avatar
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.
Old Apr-20-2012, 10:55 AM
#8
Pure Energy is offline Pure Energy
Major grins
Quote:
Originally Posted by FierroPhoto View Post
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.

Quote:
Originally Posted by FierroPhoto View Post
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?

Quote:
Originally Posted by FierroPhoto View Post
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.

Quote:
Originally Posted by FierroPhoto View Post
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/1...load-#comments

Maybe you should submit it differently as a new idea to start gathering more support for this change.
Old Apr-20-2012, 11:42 AM
#9
makco1 is offline makco1
Beginner grinner
Im 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, Ill 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 Im 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 Im willing to try working with whats 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
Old Apr-20-2012, 11:44 AM
#10
FierroPhoto is offline FierroPhoto OP
Beginner grinner
FierroPhoto's Avatar
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/1...wnload-pricing
Old Apr-29-2012, 01:38 PM
#11
TalkieT is offline TalkieT
Major grins
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
__________________
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http://www.nzsnaps.com (talkiet.smugmug.com)

Last edited by TalkieT; Apr-30-2012 at 03:29 AM.
Old Apr-29-2012, 05:47 PM
#12
PHOTOK
Guest
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.
Old Apr-29-2012, 10:42 PM
#13
ian408 is offline ian408
More wag. Less Bark.
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.
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Old May-01-2012, 08:16 PM
#14
du8die is offline du8die
Major grins
du8die's Avatar
Here's the rub for me...

Quote:
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%.

Quote:
"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.
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Old May-02-2012, 07:37 AM
#15
Pure Energy is offline Pure Energy
Major grins
Quote:
Originally Posted by du8die View Post
Here's the rub for me...
Quote:
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%.

Quote:
"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
Old Jul-22-2012, 08:13 AM
#16
Dota is offline Dota
1st time businessman
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?
Old Jul-23-2012, 05:17 AM
#17
mbellot is offline mbellot
Major grins
Quote:
Originally Posted by Dota View Post
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.
Old Aug-20-2012, 05:32 PM
#18
Cougar548 is offline Cougar548
Major grins
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....
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Old Aug-22-2012, 04:29 PM
#19
bwg is offline bwg
SmugMug Sorcerer
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we will have something very shortly that addresses the download pricing. thanks for being patient.
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Old Aug-27-2012, 09:41 AM
#20
Sheaf is offline Sheaf
SmugMug stats geek
Sheaf's Avatar
Quote:
Originally Posted by bwg View Post
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?

Last edited by Sheaf; Aug-27-2012 at 10:49 AM.
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