The living area in Montauk
In the last few weeks I’ve had discussions with prospective clients, other designers and people in the creative field. From the client’s point of view, they’re asking me to reduce my commission – in one particular case, substantially. Other designers that I’ve talked to have told me that they’re reducing their fees and altering how they work to be more flexible, bending more to satisfy the clients wishes. Some of the designers are saying they are shopping more and allowing the client to be much more part of the process. I’m in a quandry. As somebody who’s been working for 37 years a certain way and who has been charging 35% commission since I started in business (and I think this is a fair amount – I don’t mark up, I don’t charge hourly and there’s no design fee, other than rendering).
Do you all feel that this is how things are evolving? Do you feel that our market is changing where clients were much more interested in fine design finished project, now it’s much more at the level of reality tv? Are you being asked to cut your commisison and alter the way you’ve always worked? Do you feel that this is a long-term thing and that times are changing?
I would love to hear your opinion.
#1 by Barbara Bluestone on August 30, 2010 - 1:43 pm
Dear Vincente,
I too have been in the design world for many years and understand your dilemma, however I think the way you charge clients is not only very fair, I think it is a bargain considering how other designers charge. It would be a real mistake to lower your fees. Your client will still expect the same service, attention and level of expertise that you have always provided. I have always felt that when a vendor begins to lower their price, the customer begins to wonder what the service is really worth.
I am a great fan of your work, best wishes for continued success,
#2 by scone on August 30, 2010 - 2:03 pm
It’s not just the design field, it’s everywhere. America is in a deflationary cycle. It’s changing everything.
#3 by Dale on August 30, 2010 - 2:33 pm
It’s easy to say…”don’t give in Vicente!”. On the pure matter of principle, you shouldn’t have to lower fees when you’re that experienced and worth every penny you charge and more. That being said, times are still tough, and many design firms are giving in to demands from clients they wouldn’t otherwise entertain the notion of. I suppose it’s sink or swim, so if designers have to cut 10% off their bottom lines just to break even and stay in the game until things recover fully, can you blame them? I don’t know…it’s a tough question.
I just started watching Selling New York and saw the episode you were in. You are amazing as always, but it bugged me that Michael kept calling you Vincent. It’s not pronounced that way is it???
#4 by Gary Nelling on August 30, 2010 - 4:17 pm
Vicente – You have a unique vision, strong brand and finely tuned process to deliver projects, and there will always be some affluent people, even now, who understand and will pay for the best. That being said, I agree with scone. We are in a multi-generational deflationary cycle. In the last decade we have had a devaluation of our currency, a Nasdaq bubble, a housing bubble, and TWO stock market crashes! If we are lucky, prices will stay flat while people pay down debt and our economic growth catches up to the pricing. Our dependence on social programs and tax breaks funded by government debt is the 800 lb gorilla in the room that hasn’t woken up yet. I think this has affected ways of doing business and all our psyches going forward.
HGTV is a mixed blessing. On one hand it has stimulated an interest in design as a transformative experience. On the other hand it has created the dubious image that a room can be designed and executed in a weekend for $1000. No one sees the huge TV crew building and painting behind the scenes or the results six months later when the finishes have chipped off the hastily painted furniture. I think it has encouraged the do-it-yourselfer as much as the client. But America has always had a do-it-yourself ethos and the professional is always challenged to stay ahead of the game in order to offer value added. Have a relaxing week in Montauk! – Gary
#5 by todd haley on August 30, 2010 - 4:54 pm
in simple terms – can you look at a job once completed and see what you earned on commissions and take then the time spent for same and arrive at some sort of an hourly rate to accomplish that job on time only – ? they hard thing is that no two jobs are the same and you also have all the time for the expediting of the orders which is a big variable as well as some vendors are more competent than others – lastly, i think the bottom line is people are paying for your experience and expertise – do they even realize how many things that you [a professional interior designer] do that actually save them from mistakes that they would have made own their own – thereby effectively saving them money. not too mention your aesthetic – which is i would always hope a given when they pick up the phone to call you as they feel a “connection” to work work – ultimately to make it happen thought they need to feel a “connection” to their checkbook -
#6 by diane on August 30, 2010 - 4:58 pm
I agree with all the commenters. Times are changing, peopel are expecting more transparency in services they pay for and HGTV is certainly a mixed blessing.
We all know you are worth what you are charging but only you know if you can stay in business by reducing your fees. Even during tough times it is not any business owners job or duty to work for free or less than livable wages. Ask your client if they would perform their job for less? If the answer is less then strike a deal but if the answer is no then, likewise, so is yours.
Keep us posted on your decision as all designers, and others, are struggling with this problem
#7 by Lauren on August 30, 2010 - 5:29 pm
A great designer is worth every single penny! Watching design shows is great fun but it takes an innate aesthetic, an incredible amount of confidence, years of sourcing and travel, years of learning to listen to a client and observing human nature in regard to surroundings, etc. Perhaps you could just ask your clients which part of your service they would like to omit then remain pleasantly silent. They may come up with a solution that works for that particular situation.
#8 by Gretchen on August 30, 2010 - 6:03 pm
Vicente you are a renowned visionary. If I was a repeat customer perhaps a bit of a break would be in order. If they want to pay less they could find someone else but the results won’t be the same.
HGTV has very little great design going on and most of the great ones aren’t on anymore (Karen of Find Your Style, Debby Travis, a few other Canadians). All the real talent is from Canada it seems. The winners of the long contests do clumsy work to my eye. The rest are mainly clearing clutter.
I enjoy your transparency.
#9 by Denise on August 30, 2010 - 7:55 pm
Hi Vicente,
As Lauren said, a great designer is worth every penny. Don’t reduce your commission. Once you reduce it, you’ll have a difficult time increasing it again.
This is how you make your living. I’m sure the clients who are asking you to reduce your commission would never think of walking into a 5-star restaurant and negotiating the price of a meal! If they really want you to design their home, they will pay what you are asking. The fact that they are asking someone of your caliber to be their designer means thay have the money to pay someone of your caliber.
#10 by Suzanne on August 30, 2010 - 10:27 pm
Hi Vincente,
I am in the web design business but find your question very appropriate for the times. Seems now, regardless of the service provided, clients want it ALL for a fraction of what they paid in the past. (And not just services, my in-box is inundated each day with sale emails from my favorite stores…why would anyone pay full price when goods are marked down so quickly?)
These days, everyone wants to feel like they are getting a deal, and they have come to expect one. Lets hope this trend doesn’t last.
Love your work, enjoy your vacation!
#11 by melissa on August 30, 2010 - 10:51 pm
THIS MAY SOUND STRANGE BUT IN THE MOVIE AND TELEVISION BUSINESS LARGE COMPANIES HAVE TO GIVE IN ALL THE TIME WITH REQUEST AND ALSO THEY HAVE TO ADD ON WHAT THE CLIENT WANTS IN ANY GIVEN SITUATION ( SEASON TICKETS TO BASEBALL GAMES) JUST A SMALL EXAMPLE.. WHAT TO DO??? I WILL TELL YOU WHAT I SAW HAPPEN AS I HAD A FRONT ROW SEAT TO ALL OF IT… THERE WAS A LOT OF PADDING GOING ON IN BILLING!!!!!! SO, THAT THE CLIENT LOOKED LIKE THEY GOT EVERYTHING THEY WANTED AND INDEED DID GET, BUT BOY DID THEY PAY IN THE PADDING!!!! THIS IS REALITY IN LARGE CITIES AND IN HIGH INCOME INDUSTRIES…
XXOO
MELISSA
#12 by manhattapple on August 31, 2010 - 12:03 am
With 37 years of experience, and you don’t charge design fee (!), you should be able to name your price. Having said that, this nation is going through some rough and tough time now. However, once you lower your fees, client (human nature) tends to demand for more and more. My candid suggestion, you stay on 35% commission and throw in a piece or 2 with no commission (depending the total amount) as a gift from your company (and write it off as PR/marketing expense. IF you lower your commission, you may have nothing to write off?)
Cheers!
#13 by Ann @ Rose et Lis on August 31, 2010 - 1:55 am
Hi Vicente,
I agree with Lauren. With your invaluable and extensive experience, you should not cut your commission. My husband (special events designer) embraces politely asking a client who suggests cutting the budget unreasonably which part they would like to cut. It helps them understand his value and the reality of the situation.
-Ann
#14 by Vicente on August 31, 2010 - 9:54 am
I had a discussion with Preston Bailey where his sense is that things are indeed different.
He will now present three complete designs for a wedding and he feels that it’s workting better for him because the client can pick and feel that it was their choice. It seems that everybody is trying to find their niche and that clients no longer feel that the importance of a particular style that really pleases them makes a difference between hiring somebody or not.
“Yes I like this, but the other’s okay as well” seems to be the new mantra.
#15 by Roberta DAvis on August 31, 2010 - 1:32 pm
I agree with many, and the comments of Gretchen in particular resonate with me. I think a big part of what’s happening right now is caused by the economy and will change again when things get better. Part of it won’t change- the world is constantly changing.
I think that what we charge will have to be bounded on the lower end by what it takes to make a living, and on the upper end by what clients are willing to pay. If clients aren’t willing to pay the minimum, it means they don’t value the services, and that means the services aren’t worth as much, and that means we will have to find something else to do! But I don’t believe it will go that far! People are being careful with their money right now, and in total that means less work or work for less.
I personally think that architects and interior designers do not get paid enough for what they do (but then neither do teachers and firemen, for example!). People who work in business tend to be paid much more- maybe it’s because customers don’t realize how much profit is built in when the connection from their checkbook to the person’s paycheck is not as easy to see. And people do try to negotiate big-ticket items.
#16 by colette on September 1, 2010 - 10:33 am
this is so timely – im sorry to get in late on the discussion but two points…the interenet is also changing things rapidly – ie i have clients finding antiques and such on the internet. We charge an hourly fee as well as what we call a ‘handling fee’ on purchases…which means that if the clients do find things on their own we still can make a profit on the job. We have also been asked for transparency on certain jobs – and while we have always been happy to have clients accountants perform random audits of our accounts upon request (since all our fee’s are above board), I have recently added to our contract that we will not provide copies of receipts. In asking for copies of receipts clients are essentilly being given supplier contacts that we have taken 35 years to build relationships with. This I find unacceptable. I think the industry is changing for good and tho I cannot exactly see how it is going to work in the future I think based in the internet and the fact that trade showrooms are increasingly opening their doors to the public there is probably going to be a trend away from mark-up/commission/handling fee and more towards charging for our time. As someone said before, our intellectual capital as designers is something that cannot be bought or comparison shopped. Tough business. Times may have changed but i can assure you that my expenses, overhead, rent, etc have NOT changed so I stand firm on our hourly fees and handling charges.
#17 by pom on September 3, 2010 - 7:45 pm
I’m also late to this discussion but can’t help but chime in.
Exactly how much are you being asked to reduce your commisison? to 33 or 30% (I know many designers in NY charge around that) or is it more like 20%? Because 20% is what you would MAYBE ask a newbie designer or your sister who is a designer to charge. 20% is hardly going to cover overhead on a job.
And when you say the client wants to be involved in shopping, I see huge red flag. I have worked on several projects where the clients want really hands on & to shop with you. This rarely works out for the designer. Maybe it was just the few experiences I had but it seems like clients can take FOREVER to shop for things & when you are just charging commission, that can means hours and hours “shopping” and each hour takes away from your profit. I agree with Preston Bailey that it is better to present a few finished options and have the client select from that rather than “shop”. I sort of understand wanting to be hands on from a client’s end but they are paying for a service. I don’t expect to help cook my meal at a restaurant, after all.
In fact, I had been wanting to write in to Ask Vicente on this very subject. As Colette mentioned, the trend seems to be for clients to be more hands on & shopping by themselves or checking out so much online or going to showrooms by themselves. I have not heard of a “handling fee” but think this is genius. I was wondering how other designers prevent themselves from being taken advantage of. When clients want so many options presented – literally piles and piles and piles of wallpaper choices for one entry, say- and can’t make a decision it is a losing gambit for the designer who has to work so hard to present different schemes and source these samples. Does this ever happen to you? I’d like to think that being so well published and talented and sort of branded means that Vicente Wolf is above this punishing routine.
Sometimes being a designer is like being in business on a deserted island. You are never sure if other designers are asked to do things like lay out money for furniture to ship before they receive money from clients. Every design firm seems to charge a bit differently for services. I am grateful for this blog as it is nice to read advice from other professionals.
#18 by Steve Nobel on September 17, 2010 - 9:11 pm
Designers are finding that earning fees for the value of the experience with a designer’s brand is a winning proposition – your brand Vincente. Fees are amounts paid for professional advice and services, not commissions on sales. For designers to depend on commissions on sales as a means to make money is a losing proposition, leaving designers vulnerable to all of the alternate means of finding ‘stuff.’ Today’s design business is not about the stuff – its about the design. Make the transition, you will earn the rewards you deserve.
#19 by Rebecca Gillen on January 11, 2012 - 2:33 pm
I see that the other comments are from 2010, but as I am reading this for the first time, I would like to comment. I was a working designer for over 25 years in Canada. I think HGTV has taken away from the integrity of interior design as a business. It was a slow progression over the course of the years (noticed by my company) . As more people tuned into TV design, I noticed some of my clients questioning things they never questioned before. Over time I found clients began to treat us more like personal shoppers than designers. I had a good contract, charged a retainer and tried to protect myself financially without affecting my personal relationship with the client. However, as the economy declined in 2008 things seemed to deteriorate more. I was asked many times to give bigger discounts and reduce my fees. Life changed for me personally and I closed my business and moved back to Ontario. I am not working now and design just for pleasure with friends and family. For you, Vincente, I hope you stayed true to yourself. Your clients are so fortunate to have the benefit of your immense artistic talent!