This encompassing topic has come up three separate times this past week, so it must be time to write about it...
SO... if you are going to hire an Interior Designer, what will this person (or firm) charge you? Unfortunately, there is no single answer or way to compare one professional to another, and it's a bit complicated. Here's a quick primer to "common" methods, although I am sure that as soon as I post this, someone will remind me that there is yet another way.
When you shop you are usually buying a product (like a car or shoes or milk) or a service (like a dental hygienist, a CPA or a carpet cleaner). My profession is one of those times when you are buying both, and you MUST consider the professionalism and background of your "purchasing agent" because cutting corners here can absolutely ruin your project.
**NOTE: there is no commentary here on how I personally feel about all the options. That would be a mag. article, not a blog post! TMI for here, but you can contact me later!
FIRST: There are two items that a furniture or department store may/will include in the cost of an item and an individual Design Professional likely won't: incoming freight from the factory and local delivery and installation from a receiving warehouse/mover. Distance and weight of the product are the real determining variables. Sometimes a percentage of the purchase price sets this amount. A large store may well include part or all of this because they ship many things at one time.
Here We Go!
1. Full/suggested retail - or "list" price.
This is easy to explain, but you can only assume how much your Design Professional will earn. It's based on what the manufacturer suggests as a price for a store to charge. On an item tagged $100.00, the difference between the price purchased and the price you pay will usually be as little as 35.00 to 60.00. This wholesale cost varies per the agreement with each manufacturer and is tied into how much is purchased over time...
2. Cost Plus - wholesale (net) plus a percentage. And it's easier to understand what the Design Professional makes if they share their cost. It can be from 10% to 50% mark-up. At this price, you will absolutely pay freight and local delivery, plus tax.
With both of these methods of compensation, you will likely be asked for a deposit to be used toward the first purchases, assuring the Designer that you will buy and he/she will be covered for the initial work.
3. Full Retail Plus: This can be a percentage above retail (often 10-25%) or a design fee or hourly rate (perhaps 100-250.00) over the retail price. Deposit (Retainer) here as well, probably just for time.
4. Hourly Rate: This can be from under 100, or maybe less, to unlimited. Hourly may depend on whether you are also paying a percentage on the items ordered. A Retainer for several hours will be involved. Maybe you can buy your own items! It may include only the time to actually design the space and accessorize or it can include driving, phone time, purchasing and follow-up. Occasionally, the hourly rate will change based on what kind of work is done for the time charged.
5. Set Fee: This is "considered" to be "the future" of the Profession. It appears to be straightforward, but the contract between parties involved would have to be extremely tight considering the number of items and areas it would encompass.
You could be charged based on your total expected budget, or the square footage of the area designed. This method is VERY typical for commercial spaces. Often the agreement will state that all purchases will be sold at wholesale cost. Fees can range from a few thousand to (as per a designer friend out-of-town) the vicinity of 80K for a residential project. It would require discussing how and when to be paid. I was told that with a fee structure like this, all the fees should be paid in full before the first purchase order for furnishings is sent out.
Combinations of many of the above are also common (which is what I do) from Hourly and Cost Plus to Hourly and Full Retail or: either Full Retail or Cost Plus added to a fee.
**Whatever you choose, I have been taught that if you use a Designer you should assume that he/she will be paid about 20-25% of your total budget, excluding "hard construction" costs. As with anything you choose to buy, you will likely pay more for a big name or less for a novice. A young Designer is not necessarily the wrong choice - everyone has to start somewhere, and many have worked for other professionals. In any case, look at examples of work and ask for references if that helps you.
Most of my relationships with clients are long-lasting. Sometimes, a client will change Designers "just because" (which I don't really understand), but the interpersonal relationship and ability to communicate is at least as important as what you are paying and whether that Designer has a picture of your perfect home/office/shop, etc. in their portfolio. A really good Design Professional will be able to mold his or her work into YOUR taste and will be able to find the resources to fit YOUR needs. I LOVE it when a residential client asks me to work on a professional office because it means that they have considered our relationship to be based on communication and positive experience, which is my goal.