There is a lot of confusion for the general public as to how interior designers charge for their services.  I believe in part the mystery stems from the plethora of cable design shows and “reality” TV; never showing an exchange of money for services rendered, how much that would be given the scale and scope of a design project.  Another confusing aspect is that depending on the type of interior design service, e.g. remodel, décor, lighting, consulting etc. the fee structures vary.

I have decided to explain how the various pricing structures work for the interior design industry.

The various types of fees are:

  • Hourly
  • Contingency fee
  • Flat fee
  • Hourly plus contingency fee
  • Flat fee plus contingency fee
  • Hourly with estimated time plus contingency fee
  • Consultation fee
  • Free Consultation

One item I know people are very confused about is the “contingency fee” or “re-sale charge”.  It is quite understandable that this fee will throw the client off a bit as it pertains exclusively to merchandise sold “to the trade only”.  The general public can only purchase goods from retailers so this is usually a foreign concept.

To the trade only is a wholesaler that sells only to those who have a re-sale license.  Designers make purchases from these wholesalers at their wholesale price, generally 40%-50% less and then “re-sells” it to their clients at a mark-up.  This is the “contingency fee” or “re-sale charge”.  The designer’s mark-up will vary from region to region but typically you should see anywhere from 20% – 40%.  (Note that retailers also buy from a wholesaler and then mark up their pricing from 50% -100%.) This charge should never be applied to merchandise purchased from a retailer.  If your designer is doing this then I recommend you find another designer as this is considered quite an unethical and unacceptable practice.

The hourly fee is simply charging the client by the hour for her/his time.  This is usually the most appropriate type of compensation for consultancy work.

The Contingency fee only is charging a mark-up or “re-sale” charge on merchandise only, no hourly fee.  This is no longer a common practice and usually reserved for very exclusive high-end décor projects.

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