Yes, I know… Can’t seem to stay away from writing a post like I said I would eight days ago. Fine. Yes. I’m addicted. It’s just that I have soooo much to say and I love you guys!
Before I delve into today’s topic which is interior design fees and discounts, I want to talk a bit about two survey responses from last week’s post and answer a few questions because there are a couple of anxious people out there.
First of all………. the first product is going to be…………….
Oh wait. Some of you need to go grab a paper bag. ;]
Not to barf in, but to breathe in. lol
:] Okay. ready?
I know… I’m foaming at the mouth too!
Alright. I had a few nervous responses because a lot of design professionals read my blog. Probably because I said “no secrets.” There aren’t any secrets but there is a professional line that must not be crossed. That would not be nice. I promise that I am only going to speak in generalities regarding pricing. In other words, I won’t be divulging precise net prices.
I will be advising on the companies’ policies whether they be:
- to the trade only
- trade and retail
Of the latter, I will be advising
- whether it’s possible to get a deep discount or a piddly discount or something in between.
- if you can buy direct or if you have to buy through a showroom.
It wasn’t that long ago that interior designers could not enjoy a very good discount. That has changed considerably.
What has not changed, I’m finding repeatedly, is the general perception in the way we charge by the public.
The problem is…
There is no one way we charge. There’s no absolute standard and that can be confusing, I realize.
And then there’s the problem of semantics. I’ll be getting to that in a sec.
In Laurel’s Rolodex, there are going to be hundreds of vendors. Many of them will have anecdotal/inside information concerning my experience and what I have ascertained over the years.
- Therefore, this is a guide that can help both trades people and non-trades people without compromising the designer’s right to confidentiality.
Here’s the other issue someone brought up.
- Every company will link back to the vendor/manufacturer’s (V/M) website, however, I am not receiving any compensation whatsoever from ANY vendor/manufacturer on the list. That of course, would present a conflict of interest.
This is not going to be another freebie. Are you kidding? This is 27 years of experience talking here. I can assure you however, that it’ll be affordable and a fraction of what one day of college costs!
Alright back to the subject which is all about interior design fees
I read something this afternoon which prompted me to break my blogging fast and let y’all in on something.
The person wrote on this forum that their budget is 50k and was told that the designers would be charging a third of that. The person then, went on to say that this meant that the designers would take on another 15k.
NO, NO, NO!!!
I have never heard of another colleague doing this. That’s not what a third means! It means a third of the entire client’s budget, not above and beyond! And it doesn’t mean that the client is getting 35k worth of furniture for 50k. While it’s possible, it depends WHERE the designer is purchasing from and what level of discount they are able to get.
If you read the thread, everyone seems to be under the assumption that a designer’s fees are over and above the RETAIL price.
Here’s another problem and it’s really at the crux of the entire issue.
What IS retail?
The answer is not an easy one and here is why.
There is absolutely NO standard markup from a manufacturer’s net price that constitutes “retail.”
It is anywhere between double to as much as FIVE TIMES the net price.
uh, huh… you heard that right.
A few years ago, I found online a chair from Aidan Gray. It’s no longer in their line. The net price on that chair was $475. I found it online for $2,500! I know… my eyes fell outta my head too!
That company is no longer in business, at least not under the same name.
Well, there it is. While that is not as common, it does happen. I would be very wary buying any kind of expensive furniture on the internet. Please do your homework if you are braving the waters on your own.
If we were to draw a classic bell curve, the markup is generally between 2 times net (100% markup) and 3.5 times net (250% markup) with a big fat THREE times net (200% markup) right in the middle.
Your designer may or may not be getting the best price available for that product, therefore, you might be paying more than you need to, or they might be making less than they should!
This is an important distinction.
These days, many, many manufacturer/vendors (M/V’s) will sell to us decorators at full net, net, net. It wasn’t always like this, because we weren’t as valued as we are now. We get this price because:
- we made a minimum opening order to qualify for stocking dealer prices
- it’s a small company and they give the same price to everyone no matter if they are a designer or a brick and mortar store
- It was 2010 and we sweet-talked the sales rep who was trying to put three kids through college at the same time into a stocking dealer account. (a little on the hush-hush).
What about the internet? I hear you can get some great deals for deep discounts even if you are not in the trade.
Sure. And I have this bridge for sale…
“Folks. Folks. Please—“ Laurel said in her most annoying condescending tone as she whipped her glasses off of her smirking head!
The MINIMUM ADVERTISED PRICE THAT A VENDOR…
(sorry, I’ll lower my voice)
The minimum advertised price that a vendor can charge without getting their account terminated for life is @ 2.2 times the wholesale price.
This means that if they tell you where it’s coming from, they must adhere to this number or else face the consequences. It’s fair trade. This is for home furnishings, not fabrics.
My favorite is when some online
fleecer vendor marks up the product with some insanely inflated “retail price.” I have no idea even where they get these numbers from because none of them adhere to any kind of whole number or fraction to the nearest 10th! Then they give a hefty “discount” so that we arrive at a normal retail price.
yeeesh… see it all the time. In fact, whenever you see the “retail” price crossed out like that, it probably means just that.
Here’s a perfect example from one of them North Carolina “deeply discounted” vendors. No names, of course. :]
I can assure you that if a client of mine ordered this rug in a 9×13, their price would be way lower than $6,347.40.
In fact, it would be:
$5,271.00. Oh, and, I would definitely throw in the rug pad gratis. Which price would you rather pay? No worries, my business would be making a very nice profit on that rug. Is the NC company ripping you off? Well… errrm… nooooo… but it ain’t no great deal either as you can see! Especially, since you might have seen the rug in a store and they are essentially order takers. I have a problem with that.
In addition, your designer is taking care of everything. The ordering. The hassles. All the client has to do is write out a check.
The way the article comes across is that my interior design client would be charged $10,579.00 PLUS 30% of that, making the rug to be some 14,000.00 DOLLARS!
Are there some interior designers/decorators who do mark up like that?
I don’t know of any, but if you can think of it, I’m sure it exists.
Many of my colleagues do charge an hourly fee in addition and sometimes it’s just for the design phase. I charge a nominal flat fee for that. Still, if doing a whole room, you’ll come out quite a bit ahead.
Therefore, when you’re hiring a designer, please be sure you’re clear with your designer how they structure pricing.
To be clear, this is not saying: WHAT’S YOUR MARKUP?
If you really are trying to get rid of us, lol ask that question at the initial interview. It’s like chalk… Sure it’s fine to talk about fee structures and it’s dependent on how they have worded their contract. If you are unclear, it is fine to understand if their 30% means over or under full-retail as specified by the V/M.
What I tell my clients is… They will never pay above the full retail. (the MSRP, not some made-up number) and it is usually at least 20-30% less.
Why the variation?
The variation is because discounts varies— WIDELY from vendor to vendor.
I always strive to get my client’s products at the lowest possible price. Very occasionally, I’ll order either through a retail resource or catalog where all they can manage to give me is 10-20% off. In that case, the price is full retail, but that is the lowest price that is available for that merchandise assuming it’s an exclusive item. (or, the company is having a sale.) If they are having a sale, yes, it’s true, I cannot honor that, because that’s the same as my price. Again, the client doesn’t have to do anything.
Are there any other situations?
Yes, and it’s how this whole “cost Plus” thing got started. The important distinction is… Are we talking about apples, oranges, or kumquats? The furniture that I sell comes in many varied price levels.
To explain this better, there are trade showrooms such as our D&D Building in New York City which are “to the trade only.” The furnishings are not sold anywhere else such as Macy’s or Bloomingdales, etc.
Most of the furniture is INSANELY expensive. No wait. It’s ALL insanely expensive!
haha I can count on one hand the number of times I’ve ordered furniture from these places. Designers are given 40% off an already hefty sum. In this case, if the designer is paying $9,000 for a sofa and adds 30%, please ask if that is 30% of her net, or 30% of the retail?
If she’s getting 40% off of retail, that means that the retail price of the sofa is $15,000.
30% of retail price is $4,500 so your sofa would be cost ($9,000) plus 30% of the retail for a total price of $13,500
30% of net ($9,000) is 2,700 so your price would be cost-plus 30% of the net 11,700.
When a designer says in their contract that they’re charging “COST PLUS 30%” be sure to understand if it’s cost-plus 30% of the retail or net price.
Fabric is another story entirely. It’s not nearly as tightly regulated and most of those exclusive to the trade only fabrics are widely available on several internet sites.
But it’s beginning to change.
(please pin the below graphic to your pinterest boards for reference)
Alright. Back to work!