I think maybe you’ve written about something like this before on your blog, but
how do you know if your decorator is ripping you off?
Here’s what’s going on.
I found her on houzz and she seemed professional and sincere. She really sounded like she knew what she was talking about too. I was taken aback when I met her, because she looked so young, but she seemed quite confident and so all was fine.
In her contract, it states that I am going to be charged the designer’s net price and that I would never be charged more than retail.
I did have a question about her fees as it was ambiguous to me. She explained in person, that sometimes she doesn’t get a discount, but in those cases will charge me the retail price. Otherwise, her discount is 40%.
Aside from that there is a design fee of $125/hour. In person, she was rolling her eyes, about how other designer’s charge— “so complicated,” she said. Her method is very “straightforward.”
I went along with this, because it sounded like over-all, I was going to be privy to her interior designer’s discount. I am a quick decision maker; this sounded like a great deal.
What tipped me off that something is amiss, is that yesterday, I received a chandelier for the dining room.
Even at her “net,” the piece was bloody expensive. I don’t know what happened, but there was an original invoice in the box. Uh oh… What shocked me is that while I was billed $3,240 for the chandelier, the price she was charged was only $1,800!
When I asked her about it, she wrote me back several hours later, that she had contacted the showroom, and what happened is that the original vendor had put in the invoice for the showroom by mistake. However, there was no mention of this “vendor” anywhere on the invoice. The invoice was clearly from the showroom to the designer.
So, now, she’s ripping me off and lying, as well. Just bloody great.
In addition, I’ve been getting monthly bills for the last 3 months which now total nearly $10,000! And this is for only two rooms, plus a few odds and ends! I have seen her 6 times and even with travel, this is about 20 hours of her time.
Did she spend another 60 hours?
I am wracking my brain trying to figure out how she has spent that much time. She went on one shopping trip and did the two-floor plans without revision. She did some estimates and everything sounded fine, and I gave her full payment as that is what she requires. Easy. Everything is on order or has been received. No problems or issues.
I’m almost afraid to ask, but can you tell me what the hell is going on?
I’m just sitting here shaking my head because yes, it appears that you’re being ripped off, based on the wording in her contract. She says that she is going to charge you “the designer’s net price.”
First Question: How much is “the designer’s net price?”
In days of yore, interior designers purchased all of their fabrics, furniture, accessories, etc. from “TO THE TRADE ONLY” showrooms. The showroom, was and still is, today, an intermediary source between the interior designer and the Vendor/Manufacturer (V/M). There is a distinction here.
Some vendors ARE the manufacturer, and some vendors are selling product made by various manufacturers.
The premier to-the-trade building in New York City
As an aside, if you REALLY want to laugh, go and check out the LAMEST blog post here about a shopping trip with some very short awful selfy videos I took. Dreadful. I’m sitting there with my refreshments??? Holy wow, that’s impressive!!! haha
Now, you know the truth. All of your fantasies have been shattered. Oh well…
There are some pretty fabrics and things, however and the phone message is a classic.
Getting back to the topic concerning the hierarchy of the interior design trade
This system works very nicely for some V/Ms because instead of working with a million clients, they may have only have a few. The designer showroom, instead of having thousands of customers, may only have hundreds— the designers.
This helps everyone with their bookkeeping and costs. The designer, then handles, the “end-user.”
The V/M sells to the showroom at their rock bottom discount. The showroom, then extends a 40% discount off of the retail markup. Or sometimes it is called the MSRP. [manufacturer’s suggested retail price]
For designer, fabrics, we are given a net price and “retail” again, is anything from 25-100% on top of that. The most common markup is something in the trade we call “New York Retail.”
This is the cost-plus a 50% markup. Sometimes, designer’s will say “cost-plus a third.” Yes, it’s a third of the RETAIL price. That is the same as cost-plus 50% of the net price. :]
For furniture, the system works pretty much the same way with retail stores, but sometimes they are offering lower-priced options as well and many, many manufacturers. They do usually offer interior designers a discount on the furniture as well. Some interior designers shop only at showrooms and retail stores and some do not. More about that in a bit.
Second Question: How much is a retail markup? (MSRP)
I find that most people have NO idea whatsoever. We don’t WANT to know. It is what it is… Right?
Except for interior decorators/designers. We are the only ones who for some unknown reason must tell our clients exactly how much we are paying for stuff because otherwise, we will undoubtedly take advantage. And besides, most of us are just bored housewives (unless we are males) ;] who are merely marking time, in between benefits and cocktail parties. In other words, It’s not a real profession. :/
Unfortunately, Shuda, that’s the common sentiment that still prevails in this business.
After the extravagant 80s when it came to light that there were some unscrupulous decorators (who were not housewives) and then especially after the Enron debacle, the expectation is that we design/decorators will be open and TRANSPARENT (gawd, I hate that word!) about how much we are paying for furnishings and then CHARGING our clients.
Fine. I get it, to some extent, because there is still a mystique in how things are priced and it’s all very expensive. And then, we might see the same thing somewhere else for less and we feel taken advantage of. However, that is the point. Our clients CAN see the retail prices of almost anything we are selling!
Of course, no one wants to get ripped off.
Although, we are being ripped off morning noon and night on pretty much everything we buy.
Did you know?
Bottled Water is filtered municipal tap water in a plastic bottle = 3,000% markup
Coffee = 1,200% markup
popcorn in a movie theater= 500% markup [forget about the soda]
And yet, we pay it and don’t give it a second glance.
I could go on and on… makeup, clothing, anything in an airport, over-the-counter drugs…
Oh, and funeral directors. I mean, it’s a yucky business, but someone’s gotta do it. How gratifying to offer support to a grieving family and then sell them a $325.00 casket wholesale for $1,295.00 – RETAIL. That’s a 300% markup!
Dying is definitely going to cost you. Well, not you, but someone. Fortunately, it’s just a one-time expenditure.
Third Question: How much is retail in the home furnishings industry?
It is anywhere between 100% and 300%.
That number is set by the V/M. Us lowly designers have absolutely no control over that and yes, it would be nice if it were regulated, but it’s not.
I guess what I’m trying to say, Shuda, is that her contract is virtually meaningless.
Is her “retail” a 100% markup or a 300% markup? Her designer’s net could be anywhere between 10% and 75% off. And off of what markup?
CON-fused? Yes! And make no mistake, we, in the trade are too! How much should we charge for products?
These days, it simply is not true that a designer can’t get a product for something off. It might be only 10% and fine. I think that she should pocket the 10%, but that’s not what she said.
Fourth question is… Where is she buying her product? Direct or through a third-party?
If she’s buying direct from the V/M, she might even be getting some things at net, net.
By the way, there are some 180 V/Ms in Laurel’s Rolodex which sell at bottom net to interior designers. Or, at least the trade can buy directly at a great discount than they can through a store or design center.
As the advent of the internet has changed this industry, so has the recession.
BIG TIME. Many V/Ms (usually smaller companies) have only one price for everyone, or if you meet a minimum, you can buy the same item for the same price as the furniture store down the street who is struggling to keep its doors open; however, NOT all V/Ms. Some steadfastly will not sell at any price directly to us tradespeople.
Based on what you said, the “retail” for that piece was a 200% markup. (or triple the net price). Then, she sold you the chandelier for 40% off of the full retail, and for some designers, that IS the designer’s net price. Yes, it’s a lie because you were led to believe that you were buying at HER net price. In this case, it appears that she felt that you wouldn’t find out that her net price was actually substantially lower than the typical 40% off of retail
Quite frankly, her markup for the chandelier is fine, if she’s getting it at net, net.
The vendor, however, is not supposed to be putting invoices in with their merchandise. Yeesh! Most retail stores will charge the full MSRP price which would’ve been 5,400, or sometimes, they mark it down 30% and then it would’ve been $3,780. OR, they take the discount off of their net price which we have ascertained is $1,800, so that means that they would be selling the $5,400 chandelier for $4,860. In any case, you are getting this piece at a deep retail discount.
My problem, if any, is that she roped you in under ambiguous at best and misleading at worst, information.
AND, she’s charging you a hefty hourly fee in addition to shop for and specify that chandelier.
The language in her contract should state that you will never pay more than the PREVAILING retail price and usually much less based on her discount which varies. And she should indicate that she’s sharing a portion of her discount with you. That would be honest and fair, IMO. She may be giving you her entire discount in other cases, but apparently, she didn’t do so here.
The other issue is… if you are not yet done with your project and have already accrued 10k in design fees for two rooms, yes, she could be padding the hours.
I can’t be certain, because sometimes for instance, I’ll do a room layout in 90 minutes and sometimes it takes me 10 hours! Some rooms are very difficult!
If, over-all, she’s doing a great job for you and she’s stayed within your budget, then aside from some misleading language, she’s probably saved you money, in the long run in any case. I am not absolving her from the half-truths, however. That is wrong.
What is the answer? Unfortunately, there is never any way to know. There does need to be a certain amount of trust.
Get references. Ask her previous clients about her pricing and if they found them to be fair.
Research the items you are buying.
You need to know approximately how much the item you are buying is selling for elsewhere. And I mean in department stores and reputable online dealers.
However, there’s a line here, because if there’s one thing us designers hate and that is to be “shopped.” So, take a look here and there, just to make sure, but please don’t nickel and dime her. Most of us have years of experience and are saving you time, money, stress and from making a lot of expensive mistakes.
There are unscrupulous dealers on the internet who generally get shut down when discovered. Ever see, a “we do not give written quotes; we only give quotes over the phone?” Those could be opportunistic sheisters. They are putting legitimate furniture stores out of business and it is NOT fair trade.
I’m a firm believer in karma.
Reputable online dealers do not have a “call us for the price” thing. For FURNITURE and only furniture, not fabrics, there is the Internet Minimum ADVERTISED Price. (IMAP) That’s the price that’s shown, on the product page before you put it in your cart that is a 120% markup. Sometimes they throw in the “shipping.”
Shipping is not the same as delivery. Shipping is bringing your sofa to a loading dock and if there is none, they’ll either turn around and take it back to their warehouse, or dump it at the end of your driveway. And even with reputable online sources, sometimes their pricing is deceiving.
There are surcharges for EVERYTHING.
They list the price for the smallest size and/or the least expensive fabric, basic models. You have to go all the way to the end of the shopping cart to find out the TRUE price! The other dirty trick is to give you a discount when you get to your cart. It’s not “advertised.” Loopholes abound. Just, please be careful.
Is your designer not divulging her sources? Some designers feel the need to protect themselves, there too. I don’t know.
People with nothing to hide – only hide from their husbands. ;]
You might also enjoy the following posts, if you’ve missed them: