The Design Industry: E-Decorating, Fees, How Cost-Plus Works, and More... Everything You Need to Know Before Hiring a Designer

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Why I Am Writing This

A few years ago, I ran across an article about how to work with an interior designer. Initially, most of the comments were from other designers and were adding their advice in the comments. I put my two cents in as well, and since then, get an email whenever someone comments on that thread. And I have to say it has become extremely discouraging and kind of sad lately.  I know there are much bigger problems in the world than being displeased with your decorator. But still, these people paid good (sometimes outrageous) money and some of them have horrible stories to tell. Like the person who spent $1500 and in return the decorator cut some pictures off of her Pinterest boards and put them on a piece of paper. And the decorator who walked away when the client wanted to use a cabinet maker other than the one she had recommended. And so on. I know that as a general rule people are more likely to comment when they are unhappy, and of course for every person who is unhappy hopefully there are many many more who love their decorator. But when I saw the most recent comments I decided to address how the process should work, in my experience. 

Because so many people are unfamiliar still with the concept of e-decorating, I am going to talk about that process. In reality, it is very similar to in-person decorating. The only difference is that the decorator sees your space through pictures rather than in person. Literally, it otherwise should be exactly the same. And although I would never publicly criticize another decorator, I believe that those who say that e-decorating is somehow a lesser job than an in-person design are most likely simply trying to protect their business and feel threatened by the opening up of the market through e-design.  The concern is invalid, in my opinion. The right decorator can do the job by e-decorating or in person, and likewise, the wrong decorator won't make the client happy no matter what. E-decorating simply makes it more likely that clients will be able to get the right designer for them.

THE DESIGN PROCESS

1. The Initial Consultation

I ask potential E-decorating clients to send me a few photos of the space they want designed so that I am able to talk intelligently about their specific project when we first talk. After receiving and reviewing the photos, the client and I have a phone consultation that usually takes 30-60 minutes. During that discussion the client and I get to know each other a bit and I describe the process, similar to what I am doing here.

Then, we talk about the client's specific project. While reviewing the photos with them on the phone, we go over the basics like: "What do you want to accomplish in this room? How would you describe your style? How many people do we need to seat? Do you have any Pinterest Boards of what you like? Do you have a color scheme in mind? What is your budget? Are there any rooms you love that you would like this to look like?" etc. I will also ask things like "Is there any furniture that is staying? Can we hang the drapes up really high over that window? Can we paint the moldings?" etc. 

(For in-person local decorating, I would go to the client's house for this portion, but it really is the same whether in person or not.)

2. The Agreement

A. What You Are Hiring Me For (the Design Plan)

After the initial phone consultation, I send the client a proposed consultation agreement via email. It includes three major parts: 

The first part is the agreed-upon services, or what the client will receive from me. 

A Note on Choices

One important note here, and something that I always go over in the initial consultation with clients, is that I never want to say "OK here is your sofa and here is your rug." I want to give you several choices, saying instead, "Here is my favorite sofa that I know will work, but here too are some similar ones in other fabrics and other price ranges and slightly different styles." I strongly believe that there are many pieces that will work in a particular space, and anyone who says "you must have THIS particular sofa" (even if out of budget), is not being honest or fair. So I want to show you lots of pieces –all things that I love, that I know will work in your space, and that all are within your budget. (I stick very strictly to budgets unless they are unreasonable - and if they are, I tell clients that before ever entering an agreement with them. If it can't be done for a client's budget, it is always best to be honest up front rather than contracting for something that can't be done or will cost them way more than they have. Both results are unacceptable in my opinion.)

The things I show you are all meant to be basically interchangeable. So you can say for example, "I love the sofa and chairs that you picked, but I prefer one of the alternate rugs on page 8, and want to go with the higher end curtains on page 10, and the lower end bookcase on page 12." I want you to be as involved as you want to be, and of course want you to have a say in where you budget and where you splurge, and most importantly, I want you to love every single piece. These goals are accomplished best by giving the client lots of choices.

B. The fee

The second part of the proposed consulting agreement lists the flat rate fee that I charge for the room design.  Fees for a whole room re-do start at $1200 (unless you only need a few items).

C. Trade Discounts

The third part of the agreement specifies that I pass trade discounts on to clients. 

For those of you who are unfamiliar with the term, trade discounts, also referred to as designer discounts, are everyday discounts off of retail prices that are offered to people in the business. I pass these on to clients.

For example, Horchow offers this rug $1000, the pendant light for $400, and the sofa for $2600:

For people in the trade, though, it is 25% off, or $750, $300, and $1950 respectively - so the three items cost $3000 instead of $4000, saving the client $1000. What I do is order the items for you through my trade account at the discounted prices. It still goes on your credit card and is shipped directly to you. Running it through my account just allows me to get you the discount price. This is completely acceptable and not against the rules of any retailer.  Clients often save much more in trade discounts than they pay me in fees, in effect making their designs free.  

Passing on trade discounts is not that common yet, but I think it will be in the future as products and pricing info become ever more readily available to clients. As of now, most designers work on what is called the "markup" or "cost-plus" system.

A Note On Cost-Plus or Markups on Product

I don't use cost-plus and don't mark products up, but will explain it here in the interest of full disclosure on how much of the industry works.

Some designers do not take a flat fee or hourly rate, and instead work exclusively on cost-plus. And some use a cost-plus method of compensation in addition to an hourly fee, but usually at a lower percentage markup. Cost plus is where the designer would buy the items at Horchow, explained above, for the discounted (designer) prices. They would then mark it up a certain percentage, as specified in their agreement with you, before selling it to you. These markups typically range between 10-40%.  So in the example above, honest designers would sell you the rug, light, and sofa (their combined price is $3000) for somewhere between $3300 and $4200 - typically somewhere in the middle.  Dishonest designers would not disclose their discount and would mark them product up on the retail price of $4000.

I do believe that this cost plus method of compensation is an acceptable way for designers to be paid if their trade discount (actual cost to them for product) is disclosed to you. 

Where I don't like this fee arrangement is when the designer's actual cost is not disclosed. In those instances, where the client does not know that the designer is paying far less than retail, I feel that the designer is being less than honest. In addition, I think clients don't like cost-plus because it builds in incentive for the designer to recommend more expensive items for the client, because they make more money that way.

For example, in the Horchow purchase above, some designers will charge the cost plus, say 20%, on the retail price, and not disclose that they got it for far less. So while they spent only $3000, they mark up the retail prices, here a combined $4000, to $4800 (using 20%).  So, the client thinks their designer made $800, but they actually made $1800 because of that trade discount.  When you are doing a whole room, this can amount to thousands of dollars. Now imagine if you are doing a whole house.  Tens of thousands.  Again, it's all good if it is disclosed, but rarely is it because honestly who would intentionally pay their decorator that much?

Note that many many retailers have links at the bottom of their websites entitled "To the Trade," "Trade Program," "Designer Program," etc. If you click on these you can usually find out more information about trade pricing, including what the designer discount is. For example, if you click the "House and Home Trade Program" link at the bottom of Horchow's homepage, you see that designers get 25% off retail everyday

Examples of companies that have trade discounts are Pottery Barn, William Sonoma, Restoration Hardware, Neiman Marchus, Horchow, West Elm, zGallerie, Wisteria, Ethan Allen, Rejuvenation, Anthropologie, Crate & Barrel, Wayfair, Wisteria, Dwell, Knoll, Land of Nod, EVERY store at any design center, etc. etc. etc.

3. The Design Plan

Ok, back to my process.

The next step is for me to create your design plan. I try to work on only one person's design at a time because I treat the plan like it is for my own home - I want to live, sleep, and breathe it, and want it to be perfect. I take clients in order of executed consulting agreement and sometimes have a wait list, but from start to finish most one-room projects take me a few days to about a week for a first proposal. 

When it is ready, I email the design plan to the client. It is of course proprietary so I have removed the links to the products, but here is an example of the first several pages of one I did recently, in screenshot form. The client wanted a mostly rustic feel and neutral colors:

Rugs:

Furniture:

Note that the first page is a proposed summary. These are my favorite items that fit the needs and budget, and are the ones that I am recommending for the project. Like I said above, though, I also like to give choices. So the following pages of are other products that I considered and that I believe will work in the space. Everything on the first page, plus the additional recommendations, are linked to their original source with detailed information, pricing, etc.

4. Next steps

The design plan that I provide tends to be very long – usually at least 20 pages for single room projects. Again, this is because I like people to have many choices and have a say in their design. If clients tell me "Oh my god that is so overwhelming I can't do that!" then of course I edit it down to what they feel comfortable with, which has happened on occasion. I have one client who only wanted to see three choices on everything, and another who wanted to see literally every single thing I ever looked at. Both were very successful projects and just show that every client is different. 

After receiving the design plan, the client normally needs some time to review and digest it. When they are ready, we have another phone call to talk about their thoughts – What did they like, what did they love, is there anything they didn't like, etc. At that point if changes or additional products are needed, we would discuss that and I would provide them. 

When the client feels comfortable with everything and all of the final decisions are made, I do the ordering to get the trade discounts for clients. 

I like my relationships with clients to virtually never end. Some of my best experiences have ended up in friendships, both Facebook and in person, and certainly in multiple design engagements. I have clients that I provided work for over 3 years ago who still text once in a while and say "What do you think about this piece for my dining room?" or the like. I love and very much encourage that kind of ongoing relationship. I give clients my cell phone number and hope they use it. Text me a photo of the table at Home Goods and I'll tell you honestly if I like it or not. Text me "where the heck do I get a Lego table that's not ugly?" and I'll do my best to find one (both really happened). I'm not saying I can give additional free design advice forever, but the occasional follow up or random questions are fun for me, keep us connected, and are more than welcome. But even if people don't want to really keep in touch after their project is complete, I am of course always there to answer questions about placement or whatever else comes up during the pulling together of the room when the deliveries arrive. 

Notes

I was heavily criticized for writing this piece by other designers. Which proves my point that they are hiding things. Otherwise, why would it be a problem for me to explain the cost-plus system?  I strongly believe that designers can be honest and open with their clients and still make a living. It hurts the industry in general when designers aren't completely honest with clients, giving the profession a bad name.

But none of this is some great disclosure or new information. Indeed, the NY Times published all of this info over 15 years ago. So I am really not telling you anything new, and don't feel like I actually have the power to hurt an industry given my tiny size compared to them, and the fact that the info is already in the public domain. 

Here is the NY Times Article.

I also want to stress the point that I made above that the cost-plus method of decorating is completely acceptable if everything has been disclosed to you. In addition, as emphasized above, good designers who use cost-plus disclose everything and have nothing to hide. In my opinion, these are the ones to hire if you are going with that rather than a flat-fee arrangement. So please do not shy away from any decorator simply because she wants to use that method. It is still industry standard and has been used for as long as decorators have been around. But it is fair to say that clients should understand it before they agree to it.

As always, I enjoy your comments and hearing your stories, and also feel they can be very helpful to other readers.  I hope this post helps people who are interested in pursuing either in-person or e-design so that they know what to expect and have a better and more honest experience with whoever they hire. 

If you are here looking to contact me about e-decorating or other services, please follow this link to email me: SEND EMAIL