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:
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 discounted 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”. Generally designers mark-up anywhere from 20% – 35%. (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.
The Flat fee is a single price that may be broken up into payments for the project. A deposit at the beginning and then further payment due after certain phases of the work is completed with a final payment at the end of the project.
Hourly plus a contingency fee is charging by the hour and includes re-sale charges for merchandise purchased from “to the trade only” vendors.
Flat fee plus a contingency fee is the same as a flat fee and includes re-sale charges for merchandise purchased from “to the trade only” vendors. This is generally the best fee structure for the client for remodels.
Hourly fee with estimated time plus contingency fee is charging an hourly rate for time but there is an estimated amount of time to complete the project. The designer is not to go over that estimated amount of time and includes re-sale charges for merchandise purchased from “to the trade only” vendors. This is a good fee structure for décor projects for those who are working within a strict budget as there is a sense of how much the service fees will be for the entire project.
Consultation fee is an hourly fee to provide consultation services to the client. The designer is available to assist the client in purchasing, selecting finishes, merchandise etc. and to answer questions. This is a good fee structure for the DIY’s (Do It Yourselfers).
There is a variant as well to the consultation fee. There is often an initial consultation between the client and designer where the designer comes to the clients’s home to discuss the project with them. Many designers waive the initial consultation fee and because they are not being compensated for their time they will not give any design direction or relevant design information.
There is a very good reason for this; we are experts at what we do and have a lot of education, training and experience and should be (like any profession) fairly compensated. I and many of my colleagues have had numerous experiences of traveling to a potential client’s house to be pumped for information then not hired but then the prospective client takes all the information to home depot or kitchen cabinet company and proceeds with our design recommendations – a design that was not paid for. This is stealing and truly disrespectful to the individual designer and to our profession.
If you are seeking a free consultation then do not expect to be given any design direction or drawing samples of possible design scenarios. For a designer to provide this you will then be receiving a great amount of her/his time and expertise. You don’t work for free and neither do we. If you want design direction to take away and do yourself then expect to be charged for the initial consultation.
Lastly, when budgeting for your project, designer fees are always separate and apart from your spending budget.
Have questions? Give us a call: 415-722-9124.