Wanna see an example of a HUGE Groupon Mistake?
Breakdown of her Groupon deal
Giving away 15 Digital Images – She will get no add on sales after the session. None. We gave only three away and get no add on sales for most of them.
Delivering Digital images on Disc – There is a cost to the time that you spend pulling those images from a session, burning a disc and preparing it. Plus the discs cost something. Each delivery will probably take her about 15-30 minutes. Add that to the travel, shooting, scheduling and editing times and she has about 3+ hours PER CLIENT.
Online Galleries – Furthering the fact that she will make no add-on sales, she is going to upload images to an online gallery.
She sold 589 Groupons. She will make $20,320 total. A lot of you might be going, “wow, $20,320 is a ton of cash.” Let’s take a closer look, however.
Assumptions @ 589 Groupon Sales
Average 2 hours per client when you consider travel, shooting, communicating via phone or email, loading images to DVD and web, archiving images.
40-hour work week = Full Time
If she averaged 2 hours per client, then she will have to work for 1,178 hours for her Groupon clients. In a month, there are 4.2 weeks on average @ 40 hours per week. Divide 1,178 by 40 and you get 29 1/2 weeks. 29 and 1/2 weeks divided by 4.2 weeks = SEVEN MONTHS FULL TIME.
$20,320 divided by seven months = $2,902 per month which averages out to be $34,834 per year. How many of you have salaries higher than that at a normal job?
More Assumptions – Cost of Automobile/Fuel/Maintenance – $1,632 Cost
Fuel = $2.50 per gallon
An average of 10 miles each way to meet clients (20 miles round trip)
Average of 20 miles per gallon for the typical vehicle
Thus, she will use one gallon per client. One gallon ($2.50) x 589 clients = $1,472.50
AND a total of 11,780 miles on her car. Hopefully it is not a lease. If she followed the recommendation of changing oil every 3,000 miles, then that would be four oil changes @ $40 or $160.
Equipment wear and tear assumptions $680-960
Average number of digital photos taken in an hour long family shoot (this is based on our averages with our Groupon clients over the course of the last year) 100
Canon camera body has a usable life of 100,000 shutter releases
Nikon camera body has a usable life of 150,000 shutter releases
With an average number of images taken, she will take 58,900 photos. That is roughly 60% of the usable life of a Canon camera. At a cost of about $1,600 for a Canon camera body, that cost would equal
The Nikon cost would be about $680
Storage Costs – $100-200
58,900 Photos taken at 20MB per Raw photo – 1,178,000MB or just over 1,000 GB
58,900 photos conveted to jpgs at 10MB each – 589,000 or 589 GB
That is 1.6 Terabytes or about 2-3 hard drives worth of storage to hold the photos for the clients. Some photographers will delete them from their drives after delivery, so this cost could be negated.
Total Costs – On the low end – $2,450
Take the total Groupon income and reduce it by the costs and you get $17,870. Divide that amount by our seven full time months from the above math and you get $2,552 per month or $30,634 annually.