If you’re new to working with a designer or creative you may be wondering why Graphic Design prices are so expensive. You're not the only one. This is because there are a frustrating number of misconceptions about designers, including their skill-set, what they actually do, and what they need to do their job.
We’re here to dispel some of those misconceptions and clarify exactly why design costs what it costs.
Part three of this topic is all about Reach.
This is possibly the most important of all topics for you, the client. What we’re talking about here is increasing the value of your product and/or service.
It has always been the case that good design will assist in increasing your sales, and there is plenty of research backing this up. According to an Adobe study in 2016, 59% of respondents would choose an otherwise similar product or service over their competitors based on good design. Furthermore, 45% have paid more for a better-looking product or service.
Premium brands are built through clear, clean and inviting branding, social media and advertisements.
If you’ve walked into a bottle shop and picked up the wine with the pretty label that cost $1 more, you’re who we’re talking about.
If you’ve browsed between two websites that offer the same service and you’ve picked the one that looked clearer, you’re who we’re talking about.
It can be really hard to justify these costs at the beginning but when it comes down to it, design and marketing are very solid investments.
One of our favourite anecdotes floating around the internet in the last few years comes from photographer Hanad Ali, who spoke to a media buyer about their budgets for creatives. They paid $2000 for a library of 50 images. That’s a measly $40 per image. They then spent $50,000 on ad spend for each of those images. The sales they generated from each image was approximately $200,000.
Let’s look at a packaging design example, based on true experience. You may pay approximately $10,000 to have a suite of packaging created, designed, set up, quoted and project managed. Let’s say that includes 20 items. You then go ahead and print an average of 4000 of each item.
If we’re looking at cardboard packaging of different shapes and sizes, you can expect the approximate cost to be somewhere around $2 per item. $2 multiplied by 80,000 is $160,000.
Now you factor in your other costs, such as marketing and that of the product, and you work out a price that will secure you a profit of 50%. Let’s say to get that price you sell your items for an average of $15 a box. That’s a profit of $7.50 per item, and a cost of $7.50 per item.
If you sell through 80% of your products (64,000 items) that’s a spend of $600,000 and a return of $960,000, and therefore a net profit of $360,000.
You’ve paid your designer $10,000.
Depending on your company size and the stage you’re at, you may not have these kinds of budgets and that’s okay. The same principle goes for smaller investments, such as logos and initial branding. The key thing to remember is that design is an investment, and it’s there to assist in building you a healthy return.
Your success is our success!
Comments