(This is Part III of a multi-part series. For a recap of what happened, please see Part I and Part II...)

For me, the hard part was over. I had picked the three photographs for entry into my local fair. The two remaining large tasks were, for me, back into my comfort zone. Before I could show my photographs, I had to consider presentation and pricing. The two would be related, as anything I spent towards presentation would affect how much I would need to charge to cover costs or make a profit.

To review from Part I, my goals for this project were threefold: To have fun, to gain experience at this sort of thing, and to make money. The first goal was taking care of itself- the combination of engaging in my photography hobby plus the thought exercise of how to gain from it was, in my weird universe, actually fun, even though as I went along I felt I had less and less of a chance to "win" (i.e."make money"). The second goal was also taking care of itself- I'm sure actual working artists had to start somewhere, too. Though even now I don't really entertain the thought that I could make a living entirely off of this sort of thing (that is, "quit my day job"), it would be nice to think that stuff that I'm going to produce normally for fun could end up providing me with beer money or the funds to continue my recreational league hockey career. (Ice time in Vermont remains expensive. My brother Marty plays in league in California that's twice the games at half the price.)

The third goal, to make money, was the one that I was in constant danger of failing. One revenue stream, the prize money, seemed completely out of my hands. The second revenue stream, from people potentially buying photographs, was something I could work on, but I had a shaky grasp at best over who might buy photographs at the Champlain Valley Fair, let alone how much they would be willing to pay for a photograph. On top of that, I had costs to consider- I'm not just selling a unadorned photograph, it needs to be framed and wired for hanging, and there's the commission costs of 25% that the Fair takes if a work is sold.

Costs and pricing are somewhat intertwined, and while it is natural to try to separate the two to better deal with them, it's rather impossible to do that. I can't budget for materials until I know how much I can spend and still charge a reasonable price, but I won't be certain of the price until I have my costs sorted out, since I'll have to factor those costs into what I charge. Therefore, I have to employ an "iterative process", which is business school speak for "I'm going have to run the numbers several times until I get it right".

So, I broke down the projected price of one of these photographs into several parts:

Price = (Cost of Materials + Cost of Selling + Markup)

The costs were pretty straightforward. The "Cost of Materials" was how much I spent on frames, mats, wires, printing, etc. The "Cost of Selling" was the 25% commission the Fair charges. There was no entry fee to the exhibition, but if there was, that would have been covered here, too. Not covered at all was my opportunity costs for assembling the photographs and going through the trouble of entering the exhibition. I made an assumption that those costs are zero because if I were not working on this exhibition, I wouldn't have been using the time for economic gain. Instead, I most likely would have been taking a nap.

While the costs are fairly concrete values, the markup is far more intangible. In this fairly simple context, markup represents how much money I can make off of a photograph. Trying to come up with the right markup turned into another involved task. On one hand, if I charged no markup at all, then the best I could do is break even, and only if all three photographs sold. On the other hand, I did not know what a proper markup would be for my photographs. If I presumed too much and added too high of a markup, I could price myself out of this market. In the meantime, I still hadn't gotten a handle on my costs, so I decided to table the markup decision until after I had the frames and materials bought. Until then, I assumed the markup was zero. That left me with an equation that looked like this:

Price = Cost of Materials + Cost of Selling

As mentioned above, cost of selling is the 25% commission, so the equation became:

Price = Cost of Materials + .25(Cost of Materials)

Making another somewhat educated guess, I couldn't imagine being able to sell a photograph for more than $50. Running $50 through the last equation above, I had a maximum budget of $40 per photograph. I already had on hand the materials for printing the photographs themselves, the ink, paper, and printer, so I made it easier on myself by writing those off as sunk costs, leaving me free to spend the $40 on frames, mats, and whatever else I needed to present the photographs.

It was time to go shopping. Now, while I could spend $40 on frames for each photograph, it was in my best interests to spend much less than that if I could get away with it. The lower I could drive my costs, the more leeway I would have with a markup, and more flexibility I had with the final price. For frames and frame-related items, size was the largest determinant of costs, so I had another decision to make: How big should these photographs be? There were no size limits or size recommendations in the Fair exhibition literature, so I had a lot of leeway. The maximum photo size I could print was 8x11. However, straying from the standard 3:2 ratio for photographs (i.e. 4x6, 5x7, 8x10, 11x17, etc.) was rather expensive, since it would involve some sort of custom framing, which I wasn't prepared to do myself, and cost a lot. So, I settled on two common frame sizes, 8x10 or 11x17. If I used an 8x10 frame, then I could either print a 5x7 photo matted to 8x10, or a 8x10 photo with no mat. A 11x17 would hold a 8x10 photo matted to 11x17. Mats in standard sizes were reasonably cheap and in a plentiful amount of colors. In the end, I chose to print 5x7 photographs matted to 8x10 frames, partially for cost, an partially because I thought a smaller photo/frame combination was more likely to sell, since it would cost less and be less huge of an aesthetic choice.

I found decent 8x10 frames on sale for $9.99 that year, plus decent mats for $2.99, which came to about $13.75 total plus tax per photograph. I rounded up to $14 because whole numbers were easier to deal with. Running that through my price equation I got:

$14 + .25($14) = $17.50

I rounded the $17.50 up to $18, again for ease and also because it seemed the Fair only dealt with whole prices. $18 is far less than $50, so I had plenty of leeway for a markup, and I was back to determining what the markup should be. Adding markup back into the equation was a bit more complicated than my earlier equation, because the 25% commission also included any markup I had. So my new equation was:

Price = ($14 + Markup) + .25($14 + Markup)

My total costs for the exhibition were $54 ($18 per photo multiplied by the three photos). If I wanted to break even by selling just one photograph, then I would have to charge $54 per photograph. Charging above $54 would give me the best chance to make a profit, in that I would only have to sell one photograph out of the three to cover costs. However, I didn't believe that anybody would pay over $54 for one of my photographs. $50 was what I thought the most people would pay for any photograph at the exhibition, let alone mine. If I wanted to break even by selling two photographs, I would have to charge about $30 per photograph. That was more in line with what I thought I could get, and I probably should have charged that.

However, I made a stupid decision and charged $25. I did this because when I attended previous exhibitions it always seemed that other people charged between $30 and $50 for their photographs, but if I charged less than that, then maybe some of the people attending the exhibition might be more likely to purchase something that seemed like a relative deal. So, I priced by photographs at $25 each. Why I now think that this is somewhat dumb is that it meant that in all scenarios, I still had to sell all three photographs to either break even or make a profit, all for a fairly modest $5 reduction in price. I could have priced the three photos at $29 and probably produced the same effect. In any case, no matter what, I was betting that I could sell all three photographs. At my very first exhibition. Even though I had no clue what people wanted to buy.

(To be continued in Part IV)...