#Pricing Our Wares
9 messages in this thread
To Trent, John, Wayne, & Sean,
Thank you (!!!) for your response to the issue of how we go about pricing
our ephemeral product. Your openness and candor, as well as the time you
took to share your growing pains as a new business, has given Bill
Chadwick and me an overwhelming feeling of community and a real dose of
positive energy! It also confirmed for me my feeling that we are all like
the first `49ers' to arrive on the scene in Mother Lode country, and that
there's enough gold out there for everybody.
One thing your collective answers taught us is keep our price structure
simple for the client. We had been fretting it from the wrong direction
(i.e. guess-timating how much time it would take for each aspect of the
job, and computing artist creation time and unattended rendering time as
two separate rates to be added together…AGHHHH!) Pricing the work at X
hundred dollars per second seems to be the only sane way to do it, and is
a whole lot cleaner.
We were aware of the "$1000 per second" figure for higher-end houses, but
had no clue as to a ballpark range for the entry-level and medium-sized
businesses. Thank you all for your info and your great anecdotes. We are
in your debt.
Bill Chadwick
&
Sean Hannon
Ad Rats – Stamford, CT
Glad to be of hep! I found that after getting a year or two's worth of
work, you can pretty much quote on most any project 'from the hip'. I
think it's basically a matter of estimating the real amount of work a
given project will take.
Good Luck!
Trent/ReAnimators
I enjoyed the posts as well Sean!
You'll find that your raport with customers is as important as your work.
Many of my customers don't even ask how much it is going to run anymore, they
just want to do it. (Of course, if I quadrupled my rates, they might freak!)
<g>.
Sean Howard // Dreaming in realtime //
Sean, Who should we send the bill to….now what was the name of that
company…<G> Consulting fees are another matter. Good Luck.
jmb
Sean,
I don't recall if I mentioned it, but I keep project log sheets as I go
along on a project so I know how much time is spent in each aspect of the
project. (Research, Digitizing, Modelling, surfacing, animating, meeting
with the customer, rendering stills and low-res approval anims, rendering
the final and which machine(s) do the rendering. Then when I get a
similare project, I KNOW what it will take even if I haven't done one like
it for months. It also helps you guage how efficiently you work and where
you need to focus your energy to improve your performance.
I find if you don't write it down as you do it, you have a tendency to be
overly (opto/pessi)mistic depending on whether the project is interesting
or a bore. This isn't bad, necessarily, but it ought to be conscious, and
you ought to be honest with yourself as to why certain hard jobs got a low
bid and certain easy ones get a high bid. You also ought to know which
jobs were "charity" and which you actually made money on, and how much you
paid yourself. Was it worth it? Can I stay happy making this much for
that much effort? Yep,if you aren't happy, your clients will not be
either. You'd be surprised how much your enthusiasm for your product has
to do with how much they appreciate it and how well they like it. And you
can't be confident and enthusiastic if you have no real notion of weather
you are getting properly compensated for your work.
It may seem like a pain at first, but log the time (and expenses like
out-ot-house digitizing, clip-aft purchases etc) as you do the varoius
parts of the project, and at the end see how much you paid yourself per
hour. Then ask what things you could have done differently to get the
same quality at lower time investment. Annotate any ideas on the back of
the log sheets. THen the next time BEFORE you start, review those
comments, save the time, and increase profitability on the job. Then your
worst problem is how much of the savings to pass along…. that's sweet.
wmc – via Autopilot!
Wayne,
boy, am I glad I'm not doing this for a living. So far, I've done a few
animations for this cheaper-than-Scrooge client, and my biggest problem
is… I can't control myself, I have to have everything just perfect. Part
of it is I'm still in learning mode after 3 years (can't put in more than
15 hours/month), part of it is I'm building my demo reel, and don't want
to have anything of low quality. As a result, the client has animations
completely out of proportion with the price paid, my output is very low
because it takes me forever to do an animation, but at least I'm not
burned out because, as I said, I don't do this for a living.
Your "log sheet" idea is wonderful. I've been toying with the idea of
creating an ARexx program to help me log timestamped notes on my
activities.
Blaq!
Blaq,
Logging your demo reel creation give a good starting point if you decide
to make the jump.
Another idea, you may want to consider sending your anim frames to a
service bureau to ouput to beta-sp. Then create as much of an EDL as you
can from video/graphics/anim sources, take the stuff to an "on-line" suite
or a freind with top notch equipment to make your demo master. Then find
a good dupication service that can do the dupes in one pass from the
master. (The dupes aren't that expensive – about 2.50 each for 10 minute
tape with label applied and cardboard slip case.) But the quality of your
master is going to make the difference between whether it looks cheap or
not.
Also, another tid-bit. Put your best stuff and obvious "paid jobs"
samples at the front of the tape, spec work, experiments and simple stuff
at the back. And keep it fast paced and short. If you go over 7 minutes,
most prospective clients will not watch the entire thing, or they will but
will feel put upon becuase you are taking too much of their time. The
demo reel motto should be "short, fast paced, great sound, quality look".
wmc – via Autopilot!
Sean,
a friend of mine uses the following internal calculation to figure out his
rates: his time is worth $40/hr. and computer rendering time is $20/hr.
(CDN$) He uses Imagine, renders on a stock 25 MHz A3000, records to PAR,
and often delivers on Betacam tape using a rent-a-day VCR. His stuff looks
fine, but nothing to compare to a MacWorld or VTU illustration, for
example. (I figure quality must fit into the picture, so I gave you an
idea what his animations look like)
Blaq!
Charles,
Thanks for the info. We also thought of dividing up our fee between
Artist creation time (we were talking more like $75/hr) and computer
rendering time ($25/hr). Our 3 minute Demo Reel includes a few real jobs,
but mainly a lot of other pieces reflecting the variety of what we CAN do,
and for those we logged our time to get an idea how they would price out.
What we learned is that this method of pricing when applied to the
simple flying logo pieces severely undercut our worth, as it worked out to
something like $170 per second, whereas the more complex pieces that
required more time modeling and testing worked out to be closer to $300
per second. After considering the merits of Per Second pricing, Bill and
I chose this method, with an eye to a tiered structure for varying levels
of complexity in a scene. On the issue of quality, which is indeed an
important factor, we feel very comfortable that our setup, and our
combined talents, can bring in $250 to $500 per second. Time will tell.
Sean Hannon
Ad Rats – Stamford, CT