Writing > ASMP

Bidding is one of the most difficult aspects of running your business. "Bid" means to offer your services or products for a specific amount. If you’re not bidding, quite possibly you’re not working. If you are bidding, your bid has to be accurate or you won’t make any money even if you are working. But knowing that the market is tight and others are bidding too, can force you to cut profit margins to the bone. How long can you survive by doing marginal jobs? It’s a real quagmire.

New York photographer, Sheldon Secunda tells of having his book called in by a big agency's art buyer. "It took a couple of hours to assemble it because there were some very specialized needs", he says. Once the book and his bid were ready, he paid to have a messenger deliver it to the agency. When he learned later that he was never even in the running because he was bidding against the son of the agency's creative director, Secunda was furious. "At least it should be a fair fight", he says.

Bidding requires immense amounts of time and energy too. Time is diverted from other jobs and pursuits. You have to think about the job, what it will require in preparation time, what materials and supplies will be needed and how much they’ll cost. You may need to get quotes from stylists, assistants, prop makers and others. By the time it’s completed, a bid can have devoured many man-hours.

Presumably, bidding leads to working, but how often is the process a complete waste of time? Do you really stand a chance of getting the job in the first place? Have they already chosen the photographer and are calling you to be the high bid or simply to fulfill a quota for the number of bids received? How much time will it take for you to put the bid together and at what cost to your other business. But then again, if they’re sincere...

In San Diego, the chapters’ past president, Martin Trailer, has found it frustrating to bid against a studio that doesn’t need to make a profit on photo jobs. "They’ll bid a job at cost just in order to have the images to use in seminars, which is where they make their money." According to Trailer, the studio’s practice is destroying pricing and buyers’ expectations in San Diego making it difficult for other photographers. "It’s unfair competition," he says. "They have students paying to work for them and major corporations supplying them with film and equipment, so they don’t care if they make a profit and they don’t care what they do to the business for the rest of us." He bristles at the idea that some of his equipment and supply purchases contribute to subsidizing a competitor.

David Lissy, president of the Colorado chapter, was recently underbid by more than 80%. Chances are that the photographer "winning" the job lost money on the day that he shot it. But under the illusion of getting work in a sluggish market, he may have been satisfied that he was at least making something for the day. Perhaps the day would have been more profitable in the long run if he’d gotten on the phone and spent the day hustling clients.

What can be done about unfair bidding situations? Unfortunately, very little. If someone wants to frivolously request bids, it may amount to poor ethics on their part, but there’s no way to prevent it. If a competitor bids below profit making levels, he or she will probably be out of business eventually, but not before damaging the market for everyone else. You can be sure that buyers will overlook the fact that the phone is disconnected. They quickly grow accustomed to the idea that there are lots of photographers and by shopping around they can always find a lower price and more liberal terms. There’s little reason for a feeling of responsibility on their part to keep photographers in business. In fact, to many of them, paying someone $300 for a day’s work is hardly a deprivation. The disconnected phone may appear more a sign of a perceived flightiness of photographers than a mismanaged business that failed.

There are defenses though. When asked to submit a bid, ask questions. If done tactfully, you can ask anything. They may decline some answers, but you should be able to come away with a better sense of your chances and therefore an idea of how much effort you’re willing to invest in preparing the bid. Are they seeking the lowest price? Who else are they considering? Are they already inclined toward someone else?

That on-going ASMP role of education is the other defense. If asked, most photographers really don’t know how much it costs them to simply unlock the door in the morning? Do you? How much do you need to make in a year simply to break even? You can’t make accurate bids unless you know when you start making a profit. The basis for this is simple enough. Calculate your annual operating expenses such as rent, utilities, insurance, equipment and such. If you operate as a sole proprietor, you can find this figure listed as your "Total Expenses" on your Federal tax forms. Divide that figure by the number of days you work in a year and you’ll know what it costs you each day just to be there without making any profit! Now add your desired annual income (before taxes) to the total expenses and divide again. Now you have the amount of money that you need to make every working day if you put nothing back into the business. To grow, you’ll need to charge more than this figure.

The guy who bids $300 on a job including expenses may deduce that in working 240 days per year, he’s pulling in $72,000 a year. But how much profit can he really be making? If he works without an assistant and is frugal with his film, he may keep expenses to $100, but now he’s down to $48,000 and he still has his overhead and taxes. Taxes and Social Security can easily take a third of that bringing him down to $32,000. Cheap rent of $500 per month, utilities at $100, telephone at $50, advertising, equipment, repairs, insurance, transportation, bad debts and he’s easily down to $22,000. If he lands jobs on an average of only four days each week he’s down by another $10,000 and the downward spiral steepens.

The bottom line is that in order to work, you’ll probably have to submit bids. In order to survive and grow, your bids must be based on the realities of your cost of doing business. Bids that are oriented simply toward staying busy are short-sighted and ultimately harmful to us all

And while we’re on the subject, is bidding even a reasonable term or does it connotate a competition in a reverse auction of sorts, encouraging us to bid lower amounts than if we were asked to submit a quote or an estimate? "I have two thousand, do I hear nineteen hundred?" In the true sense of the term, if your costs change, the bid stands. If you figured expenses low you have no room for adjustments. To "estimate" on the other hand, means to fix a value more or less accurately. There’s some margin for error and the final tallying will reflect reasonable differences. Trade practice indicates that a 10% variance on an estimate is normal and acceptable. Should photographers provide a bid for fees with an estimate of expenses?