Hello Everyone,

When starting a business, choosing the prices of our products is a critical point as it will determine the success of it. Why should I charge XXX Euros instead of YYY Euros for a Virtual tour?

Have you all made a concise study on this subject or did you just decide randomly the prices ? How have you determined it?

Alexandre

Every market is different you just have to find your place in it.

There is not a set scale of price for any one job and any one location. Nor are all virtual tour equal in quality.

Basically this is not an easy question to answer. The topic comes up all the time, but there is no definitive answer to the question.

Try searching the forum and reading what has been discussed.

Regards, Smooth

There are many threads here that have brought this up. Pick through them and you will find some discussions on price and even some stating what they charge.

There is a rule in photography about prices. It states that "One should never charge based on what others charge. Charge based on what it costs YOU to do the job and add what YOU think you are worth."

This rule is a bit tricky because you can't really follow it to the letter. It is more of a guide.

The first thing I would do is find out what your competitors are charging. This will give you a basis of what the "market" is used to paying.

Second evaluate the quality of the work and the features they are giving in their tours. Are they including still photo galleries, floor plans, text descriptions. How fancy is their presentation? These features add value to the product. The more they offer the higher the price usually is. And the MORE TIME IT TAKES you.

Consider things like your service area. Will you have to drive far to get jobs. Can you find jobs within your local area or not.

Who will you be targeting.....real estate, vacation rentals, entertainment venues, or corporate companies.

How much did your equipment and software cost. How long will it take you to recover this cost. If you paid $8000 for a canon 5D this should way into how you charge. Better equipment usually means better product once you learn how to properly use it that is.

Real estate is the absolute bottom of the market in price. You will find it is hard to make any real profit in this market. Especially if you have competitors.

I have competitors call me all the time acting like clients trying to find out my price list. Do the same to them. I hate that.....but hey its a free market place.

Most of the time newcomers to pano work are willing to charge anyting to get the job. Even if this price is rediculously low. If you have been working in a kitchen washing dishes for 8 bucks an hour doing pano work for $15 an hour sounds like a dream......so you will have to deal with that

So figure up all the costs involved. Look at your market and what competitors are charging. Ask yourself what you want to make either per hour or yearly. Consider what you will have to charge to "penetrate" the market and get a few jobs. Keep track of your shoot and production time on a time sheet. This is important!!!!!!!!!!!! IF you don't know how long it takes you to produce a job how will you know how much to charge?

In the beggining you will have a large learning curve and it will harder for you to make the same profit established competitors are making. If you undervalue your services in the beggining it is ok. But as you get better and your product gets better so should your price.

Eventually if you work hard enough and have a good business sense and keep track of the market and your competitors you will establish your self in a certain part of it. Once this happens you can begin to see the light.

Good luck

General Lee

You also might look at a photo project from the clients vantage point.

If the images are for real estate.. then they are a good value for as long as the property is still on the market.. [read has not been sold yet].  In some cases property sells in 45 to 60 days.  Your "added value" images are no longer of value to anyone (except you of course) after the property has been sold.

Images of property being marketed for longer periods  say up to 5 years have a greater value to the client.  They are intended to show the clients property or product in order to generate sales of that product.  IF your images can generate say 3% increase in sales that is great !

Typically if the clients monthly sales revenue was $100,000 then because of your images you have generated for the client $3,000 during the first month alone. (100,000 x 3% = $3,000)

Value:
Lets say you charged $150 per pano and you took 10 panoramas. Your project price to the client would be $1,500.

Look at it from a 5 year annual point of view
-----------
Year 1
Month 1  ($3,000 less $1,500 your price) = $1,500 for the client
Month 2 thru 12 = $3,000 x11 months = $33,000
Total Revenue for client $33,000 +1,500 = $34,500.
-----------
Year 2, 3, 4, 5 = ($3,000 x 12 = $36,000 x 4 Years= $144,000

At end of year 5 =Year 1 + Year 2 through 4 = $178,500 total sales revenue for the client.

You sold your 10 panoramas for $1,500 or less than 1% of what your  Client made $178,500.

Just a thought on the matter this morning.

Hello Dave,

I'm not sure if i misunderstand your message, but I wonder what piece of crap can remain unsold on the market for 5years, unless it's MJackson trying to sell his Neverland or France trying to sell Versailles castle at a terrible price :)

It might be difficult to evaluate the impact of the panoramas/tours on sales, unless the client can compare his number with those of the previous month/period. For a new property product, it's not possible, isn't it ?

Alexandre

I am suggesting the commercial market for Hotels, Bed and Breakfast Hotels,  Tourist entertainment destinations, Resturants, Car Dealerships, Musuems, Movie Theatres, National Parks.  Generally, most locations like these do have websites you can investigate the VR Tour potential before contacting them.

And yes, property owners do maintain before and after sales statistics.

Essentially: People Places

Alexandre,

Its not uncommon for upscale properties in my area (San Antonio) to be on the market for 2+ years. By upscale, I mean a $1,000,000 property in a market where the average property is about $160-$170K for a 2000 sqft residential property on a standard city lot.

While that isn't close to 5 years, there are some that do take that long to find the right buyer. There is a certain 15,000 sqft monstrosity that has been on for 6 years and is priced under $4,500,000.

I just sold a property for a hair over $400K in 23 days that was sitting two doors down from a $450K property that was on the market for over 3 years. Not a thing wrong with either house, mine just happened to have a vtour with a website. Bought by a couple who never saw the property until the day before closing.

Ah, the beauty of the power of a vtour.

Blacktip,

It's hard to attribute sales to tours only. maybe in your case it did help alot.

Could it have been that it was $50k less than the house 2 doors down?

Surely, If I was in the market for a property and 1 was $400 and the other was at $450,  and they were 2 doors away, I would go for the $400 and think that I was getting  a deal.

either way, i do think tours help and should be somewhat of a standard for real estate.

Ah, the prices were fairly close the same per square foot. Mine might have been a few dollars more. The other home was about 250-270 sqft larger.

It was the buyer's and the buyer's agent who both said it was the vtour that got them interested in the property. The other had no tour, only stills. The buyers now want me to do a tour of the home once they are moved in so they can show their friends in Seattle their new home.

HEY What Works... really does work.  And that is a good thing.

That is the first time (hopefully not the last) where the new owner might have been attracted to the new property.. because they were shown VR Tours... and what they saw fullfilled their needs in a new home.  It saved them time spent with the realtor... in looking at 5 or 6 other similar properties.   AND yes they probably were up past midnight looking at everthing UP close and personal.. read zoomed into the computer monitor.

AND THEN he wrote.... they asked him back to make a VR to show their friends in Seattle.  Amazing -  but it DID WORK !  Appear$ every one is happy on this adventure.