How much is too much?

[Martin Pauly]

Bill,

In general, I agree with what you wrote. Price is driven by demand and supply, and if shooters agree to work for next to nothing, then that's just what they'll get. However, with regard to this:

Originally Posted by Bill Davis

First I'd know that out of a $2k job - up to a third of that needs to be set aside for taxes. Another third I'd plan to keep for profit and general business overhead. And the final third (more or less) should pay for ALL the expenses associated with the endeveor, INCLUDING my subcontractors.

Sounds quite reasonable for a job that my company is actively involved in. Such as, if my company were to take part of all the production legalities, logistics, insurance, etc., and then hire subcontractors to do the shooting, sound recording, editing etc., that sounds alright to me. But for a simple referal, where I do absolutely nothing other than take a DVD from one person and give it to somebody else, personally I'd feel horrible about adding a 100% markup.

I guess there is a reason why I can't afford the kind of luxory life that you outlined in your post. But at least I can sleep well at night, and I feel good about what I do.

- Martin

[Chris Hurd]

Originally Posted by Kevin Shaw

It's sad to see people saying that business is all about putting one over on the next fellow rather than simply trying to make a fair profit. ...the world could use a little gentility these days.

The world could use a lot of things these days, but some people are saying "business is all about putting one over on the next fellow" because in reality that's exactly what happens sometimes. Bill Davis has done a good job of pointing out just how oxymoronic "business ethics" can be -- these are mutually exclusive terms for many people. What should be and what is are often two entirely different things, and this is about what *is,* as ugly as that may be, and how Chris Burgess can best deal with it.

There has been some excellent advice in this thread. I think Chris should be ultimately prepared to go into direct competition against this photographer for the wedding video work in his market. And he's already married to a photographer, so perhaps he and his wife can take on the photography business as well. But in terms of "what's right" with his current arrangement, "what's right" is what he settles for. If I were in his shoes, I'd ask for at least 75% of the final cost to the photographer's customers, and I'd be fully prepared to start my own business and go into competition against that photographer if his answer is no.

[Chris Burgess]

Wow, my thread rates a post by Chris Hurd...nice!

Bill, I see exactly what you are saying, I just don't agree with it, thats all. I would appreciate it if could keep your perceptions to yourself however, as they are way off base and really a perception over the internet is equivalent to a blind person describing what a flower 300 feet away looks like at that moment.

I think this thread proves one thing for sure, there is no "hard and fast" way to handle anything relating to independent video, etc.

I really like the few references to taking a percentage of the final sale, but that relies on the other person being 100% truthful about their final invoice, and according to the "swim with sharks" people, that is an impossible thing to do.

Competition is up in the air at this point, but i do agree it is not worth arguing with the gentleman about the past, So we will see what happens.

Again, thanks to everyone for all of the responses, even Bill, as it is a very real aspect that he presents to the argument.

[Bill Davis]

But for a simple referal, where I do absolutely nothing other than take a DVD from one person and give it to somebody else, personally I'd feel horrible about adding a 100% markup.

I guess there is a reason why I can't afford the kind of luxory life that you outlined in your post. But at least I can sleep well at night, and I feel good about what I do. - Martin

Martin,

If that's what's actually happening - one guy takes a disc and delivers it to another - than I totally agree with you.

But that wasn't my reading of the OPs situation.

I thought that the OP was hired by someone as a subcontractor after that initial person had developed the lead and then negotiated and entered into a business agreement with the customer.

Only at that point, did they seek out the OP as a sub to do a part of the work.

And I say a PART of the work, because I believe that the very act of FINDING the client and negotiating the business agreement is the probably the single MOST valuable part of the deal.

THAT is what drives busineses. Plain and simple.

Without the paying client - there IS no business.

So whoever takes responsibility for securing THAT part of the equation will typically control a lot of the transaction.

Simple fact of business life.

[Jarrod Whaley]

Sure, Bill, but the original poster is still being ripped off, and the photographer has been caught lying to him in order to increase his own profits. That kind of stuff happens, but it doesn't mean that Chris has to accept it happening to him.

Chris, get out of this arrangement if you can't negotiate for a much greater percentage. Granted, it may take you some time to build up enough contacts, etc. to compete on the same level as your photographer "friend," but think of it this way: with the cut he's taking out of what the clients are paying for the video, you'd only need to do half as many jobs on your own to make the same amount of money. :)

[Bill Davis]

Originally Posted by Chris Burgess

Wow, my thread rates a post by Chris Hurd...nice!

Bill, I see exactly what you are saying, I just don't agree with it, thats all. I would appreciate it if could keep your perceptions to yourself however, as they are way off base and really a perception over the internet is equivalent to a blind person describing what a flower 300 feet away looks like at that moment.

I think this thread proves one thing for sure, there is no "hard and fast" way to handle anything relating to independent video, etc.

I really like the few references to taking a percentage of the final sale, but that relies on the other person being 100% truthful about their final invoice, and according to the "swim with sharks" people, that is an impossible thing to do.

Competition is up in the air at this point, but i do agree it is not worth arguing with the gentleman about the past, So we will see what happens.

Again, thanks to everyone for all of the responses, even Bill, as it is a very real aspect that he presents to the argument.

Chris,

First, I was probably a bit harsh. Sorry, but understand that this comes after 30 years of self employment making videos. And looking back over that history, what I wrote for you is what I WISH someone had wrote for ME back when I was getting started.

It could have perhaps made my first decade a lot easier when I worked my butt off and barely had any money left over to support my family at the end of each month.

Eventually I got smarter. I realized that there's nothing wrong with running a profitable business. And the fact that the VAST majority of new businesses FAIL in the first 3 years shows that running a profitable enterprise is a LOT harder than most people think.

I believe the actual truth is that if your prices are out of line, OR if you're trying to pay what are ACTUALLY sub-standard wages or professional fees, the market will tell you that pretty quickly.

I believe you ran up against that. A vendor who felt they couldn't participate with you at the level you required. Typical business circumstance.

The hard thing, I believe you'll soon discover is finding REPLACEMENT clients who CAN pay what you feel is proper.

So I hope your way turns out successfully for you.

But for me, until I learned to pay attention to margin and profit and all the other business stuff that fill VOLUMES in the local library - it just didn't work.

Honestly, good luck and let us know how things work out.

Oh, and if I might add one more useful thought. Be wary of that idea that "there is no "hard and fast" way to handle anything relating to independent video, etc."

That's essentially saying that all the writing about basic business concepts developed over the generations are all wrong.

The truth is that business is still business. And learning about how it REALLY works is actually a pretty darn good way to increase your odds that you'll get to keep doing what you obviously enjoy - AND actually make a decent living doing it.

FWIW.

[Bill Davis]

Originally Posted by Jarrod Whaley

Sure, Bill, but the original poster is still being ripped off, and the photographer has been caught lying to him in order to increase his own profits. That kind of stuff happens, but it doesn't mean that Chris has to accept it happening to him.

Chris, get out of this arrangement if you can't negotiate for a much greater percentage. Granted, it may take you some time to build up enough contacts, etc. to compete on the same level as your photographer "friend," but think of it this way: with the cut he's taking out of what the clients are paying for the video, you'd only need to do half as many jobs on your own to make the same amount of money. :)

Jarrod,

Yeah, he probably IS being ripped off. (Hard to say because we're only getting one side of the story. For all we know the invoice he peaked at was generated after 52 meetings over four months with an obsessive mother of the bride who richly deserved a big fat "hassle tax" But let's call the story EXACTLY as he relates it.

My contention is STILL that the single MOST important part of any business effort will always be SALES. Period. End of story.

And if the photograher is successfully doing that job, it's his money flow to control as he sees fit.

I'm not saying that it's in ANY WAY fair. I'm saying it's REALISTIC.

If you're DOWN STREAM - the water that reaches you always will be a function of the desires of the guy who owns the dam upstream.

Ces't la vie.

[Jarrod Whaley]

Bill, sure. It is entirely fair for the person who makes the sale to take a reasonable cut of a subcontractor's fee, but 50% of the total paid by the customer is not reasonable. Sure, this photog's just trying to make a profit. The thing is, though, Chris could very easily decide to let him make his 50% sales fee off of some other poor schmuck. There's absolutely no reason for Chris not to do that, since he could go out and make the same amount of money he makes now even if going it alone meant a huge drop in the amount of work he's able to get.

In other words, there's nothing any more "wrong" about what the photog's doing (except the lying and concealment bits) than what McDonald's does when they charge $1.50 for sweetened water... but at the same time, the beauty of capitalism is that you have a choice, and if Chris chooses to continue paying a 50% sales fee, I think that's a very bad choice. 15%, 20%, OK. 50%? Crazy.

Not to mention the fact that this guy seems to have forced Chris into this 50% arrangement by not telling him he was taking that big of a cut. I'm sorry, but that's just shady.

[Jay Gladwell]

FWIW, and this may not apply, several years I had shot some footage here in the Everglades of alligators mating. At the time I was working with a producer on a nature doc. I was told that up to that point, no one had ever captured that on video. Whether or not that was true, I have no idea, but it sure sounded nice at the time (as of today this certainly isn't the case).

Anyway, some time after that I was contacted by the producer (she never paid me for my weeks of work on the defunct doc) saying that someone in NYC was very interested in licensing my footage. Great!

However, I was told that the person in NYC would take 50% of the total fee and the producer (who never paid me, remember) wanted 25% for turning the NYC connection onto my footage. That left me with a measly 25% for "one-of-a-kind" footage! I don't think so.

Long story short, I told her, politely, to go fish. Why? Because to me it was a matter of principle. In my mind--right or wrong--I'd rather not make one red cent as opposed to being taken advantage of. She didn't see that way, and she was hot.

It all boils down to a matter of choice. I chose to pass.

[Chris Hurd]

Originally Posted by Chris Burgess

Bill, I see exactly what you are saying, I just don't agree with it, thats all. I would appreciate it if could keep your perceptions to yourself...

Well, you're not going to like what I'm about to tell you at all. I have known Bill Davis (online) since I first started posting to Usenet back in the '90's, and on a face-to-face basis since the days long before I ever had the idea for DV Info Net, back when I moderated message boards for Canopus. Just a couple of weeks ago in Las Vegas, I plied him with copious amounts of alcoholic girly-drinks, pretty much begging him to take a moderator position here. So if I have anything to do with it, hopefully we're all going to hear a lot more about Bill's perceptions, because the value of this man is that he's been there, done that, and worn out several T-shirts, and he'd rather tell you like it is instead of what you want to hear, because telling you like it *is* is what really helps you. Bill Davis is incredibly generous with his knowledge and expertise, and he has climbed the ladder that a lot of us are stumbling on. I view his presence here and his perceptions as invaluable and I'll do whatever I can to persuade him to post more.

Originally Posted by Bill Davis

I'm not saying that it's in ANY WAY fair. I'm saying it's REALISTIC.

If you're DOWN STREAM - the water that reaches you always will be a function of the desires of the guy who owns the dam upstream.

As always, Bill: thank you, thank you, thank you.

If there's any real degree of usefulness to this site, it's in telling it like it is, and then figuring out how to turn a bad situation around. We can talk about "what should be" and how the world would be a better place, etc., but that doesn't accomplish anything. Recognize a situation, call it what it is, and then turn it around. That's what this is all about.

Turning this situation around for Chris Burgess is going to involve getting himself upstream -- either by some firm renegotiation or by going into business and competing directly.

[Steve House]

Originally Posted by Chris Burgess

nothing in there about business ethics huh? nice...

so, basically what you are saying is that we all need to get one over on as many people as we can in life to succeed?

you would be perfectly alright if the same thing happened to you?

Thanks everyone for the feedback...time to re-negotiate (with contracts) all of the pricing structures...

I don't see what he did as getting over on you. You quoted him a rate you were willing to work for. He quoted his client a rate that he thought they would be willing to pay. Where does the one influence the other? If you wanted to bigger share of the pie, you should have stood firm on your original higher quote and been willing to walk away from the table if he didn't agree to it. You may be kicking yourself because you agreed to do so much work so cheap but that's hardly his fault.

"Keystoning" is not at all unusual in the retail consumer marketplace. You go to the jewelery store and buy your gal a $500 ring. It wouldn't be at all unusual for the store to have paid $250 for it from their wholesaler. How is this any different? You sold your services to him wholesale and he re-sold them retail. In the process he added value and assumed some risk, both of which translate to $$ for his pocket. For example, if the client had stiffed him you would have still been paid, right? Assuming that risk is worth money to compensate him.

[Bill Davis]

(needless flattery snipped - tho greatly appreciated, copied, enlarged and decoupaged over my wife's vanity mirror and onto the inside of my son's backpack...; )

Chris H,

Nothing I'd enjoy more than feeling like I had the CONSISTENT time to commit to the board. It's a wonderful resource and I do greatly enjoy being here when I can.

Unfortunately, right now my clients, my family, and my volunteer obligations are all I can handle.

But that won't last forever.

Know that as soon as I feel I can commit to more - this is the first place I'll come.

[Allen Williams]

Bill you are brutally correct.
Painful as it is for some to accept, when you slice & dice it, no one can dispute the facts.
Allen W

[Denis Danatzko]

I don't mean to hijack, (or embarrass Bill), but I do want to echo Chris and give Bill his props, though from the other end of the spectrum.
I had the chance to work with Bill on a single, 1-day shoot, having never met each other before it, except for a couple of phone calls. I also had the rather nervous pleasure (?) of watching him hover about 12-15 feet in the air, balancing on a shaky and broken wooden pallet lifted by a fork-lift, while using MY barely-used HVX and tripod during a day when thunderstorms were passing in/out all day. (I wish I had a photo of him doing it). Talk about a tense moment; one wrong step or shift of his weight, or unexpected thunderclap, and we could have lost Bill, the camera, or both. After wrapping, there was one brief but awkward moment where I learned a lesson from him that I've since tried to put into practice. That's led to turning down a few jobs, but I think it's opened up others. Bill, and his advice, came through in spades. I'd take whatever advice his experience provides, and would work with him again in a heartbeat. (And no, this isn't begging him for more work; it's more testimony to his business sense...at least my perception of it).

[Shaun Roemich]

I'd have to admit that Bill (and his "entourage") are right HOWEVER a 100% markup is certainly excessive compensation for essentially asking "would you like fries with that?"

Yes, the other party is taking some risk by hiring you but I would argue that his mark-up is bordering on ridiculous. What is your recourse? If you aren't making enough money off the gig to satisfy your want or need, terminate the relationship. If you WERE happy with your compensation and only upset by the fact that this person is making money off you, you need to reconsider the line of work you are in.


Just my .02, folks.