Yes, per image pricing is an important piece of information. But far, far too many people think it’s the beginning and the end of calculating costs. Or that it’s the only thing that matters when deciding between retouching options—like whether to hire in-house, use freelancers, or outsource.
It’s not. Far from it.
Your real cost, or total cost of ownership, must factor in TIME: the time you spend in onboarding, management, and your time to market.
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How to Calculate Your Total Cost of Retouching
If you are going to break image editing down to a per image price, do it right.
A common mistake is to divide a retoucher’s salary by images they retouch in a year and equate that with your in-house per image price. The problem with that is it ignores a host of costs, both direct and indirect: health insurance, computers, office space, HR, time to market, etc.
Another—even bigger—fallacy is to calculate an in-house per image price by dividing a retoucher’s max capacity by salary (“John can retouch 30 images a day times 260 working days a year divided by 70k salary is 11¢ an image! What a deal!”). That not only ignores the more hidden costs of staffing, it assumes a retoucher is working non-stop. They’re not. There are vacation days, sick days, training days, and of course slow days where you don’t have enough images to keep them occupied.
So how much does an in-house retoucher really cost?
We created the following calculator for you to use, based on what we've seen when visiting photo studios and public data regarding health care costs, salaries, office space rental prices, etc.
Where do these numbers come from?
Public sources, using Los Angeles, California as our example because it's one of the two fashion capitals of the U.S.A.
Let's work through it together.
First let’s calculate the direct costs. These are things with clear price tags we can calculate without too much conjecture.
In-House Direct Costs: $75,706 - $85,706
- $60-$70k - According to Glassdoor, a photo retoucher in Los Angeles can expect about $50/hr as a freelancer (based off three hourly listings, 1 for a studio, 1 for an agency, and 1 for a brand), or a regular salary of $60-$70k
- Health care costs
- $11,750 - U.S. company’s average health care costs per-employee per-year according to a Statista survey
- Most creative departments live in the Apple ecosystem.
- $1299 - 21.5-inch iMac, Retina 4K Display, 3.0GHz Processor, 1TB Storage
- $350 - Wacom Intuos Pro digital graphic drawing tablet, medium size
- $99 - Magic Mouse 2
- $99 - Magic Keyboard
- $157 - Lacie 2 TB Thunderbolt and USB 3.0 portable hard drive
- $120/yr - Adobe Creative Cloud (Photoshop, Lightroom, Bridge)
- $210 - Ikea Bekant desk
- $50 - Ikea Renberget swivel chair
- Office Space
- $1572 - A standard cubicle is 48 sqft (8x6) and office space in Los Angeles averages $2.73/sqft/month, according to a California rental market whitepaper based off Cushman Wakefield reports. Keep in mind that as you scale, you need additional space for conference rooms, walled offices, hallways, kitchens, break rooms, etc.
Okay, getting pricey. But at least I’m getting dedicated, always-available year-round retouching capacity, right?
Lost Productivity Costs $9080
Included in that price tag is quite a bit of unproductive time you’re paying for:
- PTO, holidays, sick days
- $6400 - Calculated by day rate of $268 for a 70k salary, multiplied by 24 PTO days. PTO day estimate: 10 days of paid vacation, 5 sick days, 9 paid holidays (Memorial Day, Independence Day, Labor Day, Thanksgiving + day after, Christmas + day after, New Year’s Day + day after).
- $2680 - Calculated by day rate of $268 x 10 days of training. Assuming a new retoucher will be at max productivity after two weeks of onboarding to a new job—learning the aesthetic, meeting the team, filling out paperwork, learning the workflow—is being generous.
- $$?? - Photography is seasonal. It takes a large team to handle the peaks—that means even more downtime during the valleys.
That’s 34 work days where a full-time retoucher isn’t actually working for you, at just over $9k value.
WITHOUT factoring in the inevitable slow days. Standard downtime, where the team you had to beef up to handle rushes now doesn’t have enough work to occupy them.
But that’s it, right?
Nope. If you’re successful, you’re going to grow! Building a team has expenses beyond just summing individual costs.
Scaling Costs: $11,966
Unless this is your final hire ever, there’s going to be scaling costs. Those are costs you incur as your team grows and you need more support staff and structure, like HR and management.
- $2,966 - Don’t forget about HR! You can’t spend all your time figuring out health insurance plans, managing legal compliance, and handling complaints. Not only does HR save time, it’s necessary for lawsuit mitigation. According to Bloomberg’s HR report, in 2017 the staff to HR ratio was 100 to 1.4, and “organizations with fewer than 250 workers spend $2,966 per employee.”
- $9000 - Based on a $90,000 Retouching Manager salary, and one manager for every 10 retouching employees.
We’ll just gloss over the additional office space needs here, and potential moving costs.
Instead, let’s take a look at what can potentially be the single greatest expense around retouching bottlenecks: the cost of delay.
What do retouching bottlenecks really cost you? Figuring out your Cost of Delay (Time to Market)
If you’re looking at hiring retouchers, or partnering with a retouching service, it’s probably because you’re already well behind. It might be taking you one, two, three weeks or more to get a photo up on the website.
That’s a hugely expensive problem, and a lot of younger online retailers don’t realize it. They try to staff just enough to keep only a little bit behind, because the cost of an idle retoucher is more obvious than the cost of delay (it’s way easier to see Jon swiping through Instagram than it is to see a customer move on from your website—or never land there in the first place).
Big mistake. Time to market can have a huge impact on your bottom line.
The simplest formula for figuring cost of delay is Lost Time Cost + Peak Reduction Cost. So if you’re late by a month, your cost is the sales from that month + however much your peak sales are reduced. That’s hard to figure, but it’s real.
Let’s use a handbag company as an example. Let’s say they’re two weeks behind in retouching, have an average price of $300, sell about 1000 handbags a month, and their profit margin is 8% (several percent less than Kate Spade and Coach, per Statista). What might their delay cost them?
Their lost time cost alone is $11,200. That doesn’t factor in additional expenses or a reduced sales peak.
Some people think delays simply shift revenue by however long the delay is, but that’s not accurate.
Delays increase expenses, reduce your peak revenue, and reduce your revenue earning time period.
First, expenses. That’s pretty straightforward: the longer you’re paying people to work on a product, the greater your expenses and the less your profit for that product.
Reduced Earning Time & Reduced Peak Sales
Next, why do we say you’re selling it for less time? Why isn’t revenue simply shifted by two weeks, or a month?
Because the end of your product’s salable life remains about the same, and your peak sales decrease the later you launch.
Delays eat into shelf life
Especially in fashion, the shopping cycle is highly seasonal and trend driven. When a customer is shopping for a winter jacket, it’s probably because it has gotten cold and they need it now. They’re not going to wait, and once they purchase it they’re done for the season. Your product also has a set end-of-life (the end of the season) that doesn’t change depending on when your listing goes up.
So you’re both selling for less time AND less people are buying it during that time. More competing options are out there, your customers have already gone to competitors, and it’s harder to win the sale.
Missed events = missed sales
Additionally, you may miss out on event driven trends: trade shows, fashion shows, holidays, social events. If a Kardashian gets photographed in a crop denim jacket ahead of Coachella and there’s a mad rush by their fans, but your photo of a crop denim jacket is stuck in retouching and your listing isn’t up, those sales aren’t coming back.
And God forbid you should be late around a key date like Thanksgiving week!
For comparison, consider late product shipments from vendors. In The Art of Retail Buying, Mary-Louise Jacobsen suggests buyers require vendors to discount their invoices 5% for their first week late, 10% for a second week, 20% for a third, and then cancel the order completely if it’s any later.
While e-commerce is different in many ways, in this case the principle is the same—every day you’re not selling a product it’s losing value.
Factoring Outsourced Retouching Costs: How much time do you actually save?
So it’s pretty clear why most businesses are going away from in-house retouching. It’s just too expensive, too slow, the bulk of the work is repetitive and objective, and because it’s digital it’s ripe for outsourcing.
Yay! Let’s do some quick googling, get a bunch of quotes, and go with the lowest per-image price, right?
Take a lesson from your in-house experience.
Remember, it’s not just about salary. It’s about time: onboarding time, management time, and time to market.
The real cost of cheap outsourcing: your time
The formula you should use:
Base per-image price + onboarding time + ongoing management time + cost of delay + reputation and security risk = total cost
It’s easy to throw out a low quote and make promises. You need to look at whether there’s a system in place to actually back it up.
Do you flip a switch on a machine, or are you essentially just managing a remote team?
What’s onboarding time? That’s time until operational—the time you take instructing the vendor to get up and running.
A lot of vendors will simply say “yes” to everything during the RFP phase and then try to figure it out on the fly. They’re afraid to ask clarifying questions, there’s a language barrier, and you end up in email battles and time shifted phone calls where you try to talk your way through something that’s extremely visual.
That’s a huge timesuck. You spend hours and hours trying to communicate, you’re not getting usable images, and you have to repeat the process as the remote team churns (and cut-rate outsourcers have heavy, heavy churn). The graphic designers you’ve freed from basic retouching aren’t really free—they’re spending all their time in QA, shaking their head as they watch quality go off a cliff.
In the worst case scenario, after all of that you discover that the problem wasn’t just communication, it was competence. They’re not actually capable of the quality you need. Maybe they used a crack retoucher on a handful of trial images for you, but the real everyday team isn’t anywhere near that level.
Then you’re just screwed and have to find another vendor.
That’s traditional outsourcing.
Ongoing management time
When there’s no online system in place, it can feel like the onboarding process never really ends. Any time you want to place an order, you have to upload images somewhere—maybe put them into a shared dropbox folder—and then write out explicit instructions by email.
Simply writing instructions is time consuming enough, but you probably also need to provide illustrations, send follow-up “status?” emails, and make sure they know the deadline on each order.
You’ve probably got quite a few orders out since you’re constantly photographing more products, so maybe you have a spreadsheet where you’re tracking order status. Instead of doing more productive work, you’re perusing the sheet and comparing it to different dropbox folders, so you can mark images off as sent, in progress, received, in re-edit, etc.
Ah yes, re-edits. You need to perform QA on every image you receive. That means looking at before-and-after images and at the instructions you sent to be sure they were followed. Then, when you discover a problem, sending off an email with even more explicit instructions and hoping your point of contact there sees it, understands it, and acts promptly.
Cost of Delay
We don’t need to get into the weeds regarding cost of delay and time to market again, but you need to factor delivery time into the equation. Real, completely finished delivery time. If you can’t use images until after an extensive QA and re-edit process, that’s pure delay.
What time of the day do you receive your images? Make sure you get your images early enough for them to be uploaded to your website or CMS the same day.
You’re looking for help because your image volume is increasing, and will continue to do so as you grow. Does the vendor have a system that scales? Will it take up more and more of your time as you grow, or will your workflow and time usage remain unchanged?
If they’re simply hiring more retouchers as your volume increases, then there will likely be a ramp-up period for their retouchers before they’re useful, akin to onboarding. That means the vendor will need lead time to increase capacity, and rapid growth will create bottlenecks.
Corporate Responsibility / Reputation Risk
Make sure the company you’re working with operates reputably and treats their workers the way you would want to be treated. It’s just good business—happy workers will do better work. It can also be a brand tarnishing nightmare if you become entangled with a digital sweatshop.
Learn more about why Pixelz' believes Impact Sourcing is the right way to operate.
Who’s handling your data? Is it encrypted in transport, in storage? You don’t want your trade secrets, systems access, and images to be peddled to the highest bidder.
Here's 20 retouching infosec questions you should ask every image editing vendor
The lowest total cost of ownership: A Retouching Platform
Pixelz retouching platform was built to modernize outsourced image editing. After spending years editing millions of images for the most demanding brands and photo studios in the world, we created S.A.W.™, an AI-powered Photoshop assembly line. Image editing is broken down into micro-steps that are completed by artificial intelligence, automated processes, and specialist editors.
It’s super consistent, lightning fast, and scales. And it’s incredibly easy to use.
Instead of emailing instructions, making late night phone calls, and passing PDFs back and forth, you control everything online. You click your way through a process that objectively defines the image edits you need, eliminating most subjective judgment calls. Where necessary, you can draw on the image, communicating visually.
Need to rush a batch of images? Press a button and get them back in 3 hours or less.
Want to compare before-and-afters? Do it online, with guide lines and markup tools at hand.
Want to stack product images on top of each other for multi-packs, or recolor one image into multiple colorways? Press some more buttons online, with clear instructions and pricing.
The platform gives you insight and control over your retouching at a level you’ve never had before, saving you time. It safeguards your data and your reputation. It accelerates your time to market, with standard next-morning delivery for images uploaded before midnight.(Here are all the dangers of using a service that doesn't utilize a platform).
Sound expensive? It’s not.
Using technology and a lean workflow to regularly process millions of images means that per image prices are driven down by volume and economies of scale.
And—as we’ve been stressing throughout this post—it saves you more TIME than any other solution out there.
That’s why Pixelz retouching platform has the lowest cost of ownership on the market today.
Try it today.