What's Behind Interior Design Service Prices
“What will this cost me?” is the most frequently asked question interior designers hear. And most designers will put off the answer until they know more about the entire scope of the project, the clients, and what is involved. It’s no wonder there is confusion about the process, sometimes even among the designers themselves.
Several years ago, at an architecture trade show in Boston, I attended a panel discussion on pricing design services. New in business, I assumed most other attendees would also be newbies. I was surprised -- shocked even! -- when the audience was asked by a show of hands how long they’d been in business. While half the attendees were new business owners, the rest had been in the field at least 5 years ... some for over 20. This eyeopener taught me that pricing design services is complex and always in need of evaluation. Given the complexity of the issue for professional architects and designers, no wonder homeowners are nearly always confused about design service pricing.
Typical Pricing Systems
Here are the 5 most common ways that the majority of interior designers and decorators charge for their services:
1. Hourly rate for each and every moment spent working on the project: This includes all meetings, telephone calls, emails, shopping, designing/drafting, buying, installations and logistics. The hourly rate itself varies by geographic region and experience/professional standing of the designer, but roughly it’s between $75-$250 per hour. Larger firms will have tiered structures based on who is working on the project (assistant designers vs. the owner, for instance) and one-person shops will generally have a single established hourly rate.
2. Goods are sold to the clients at the designer’s cost or clients pay direct to retail stores and hire their own contractors: Clients can control the total dollar amount spent to the extent that they are responsive to the designer’s queries and quick to make decisions, and do the legwork of ordering retail products and receiving shipments themselves.
3. Hourly PLUS markup on goods: Includes all of the above, plus a markup on custom and trade-only merchandise, and a percentage on any retail purchases made by the designer on the client’s behalf. This additional markup covers the design firm’s time and expenses related to managing all the ordering, logistics, troubleshooting, delivery and installation of the merchandise. If the client would like a turnkey level of service where their only job is to approve and pay for the design, this is the best type of plan.
4. Flat fee rate: A flat fee has both advantages and disadvantages. The clients sign a contract knowing exactly what they will be paying their designer and they can expect no unpleasant surprises. The designer establishes a specific payment structure to cover costs and provide income at regular intervals. However, both client and designer must clearly understand (and agree on) the entire plan at the outset. Any subsequent changes may require a renegotiation of the contract. Designers fear that a flat rate may mean the client will waste their time because they aren’t paying by the hour. A project estimated to take 100 hours that suddenly takes 200 means a big financial loss for a designer. On the other hand, clients fear the designer will charge more than with an hourly rate.
5. Percentage of the entire budget: This means that every dollar spent on a project is tallied up at the end and the designer receives a percentage, usually in the 15-30% range. A budget is established from the start and payments are made based on the estimated total budget. By the end of the project, the total expenditures are added up to be sure the designer has received the agreed upon percentage. For the most part, the flat fee rate (#3 above) is calculated using this same equation, but is capped, whereas the percentage system is not capped.
Consider What You Want from a Designer
When contemplating the potential cost and value of design services, consider the way you want to work with the designer:
1) You want a designer to create a vision and design plan only: You will be doing all the legwork, managing and hiring contractors, ordering furniture and dealing with all the logistics and trouble shooting as needed. You are willing to put in the work involved so that as many of your dollars as possible go towards the actual decoration of your space.
2) In addition to a design plan, you want a full-scale, turnkey project where you only want to have to speak with the design firm and they deal with all other parties: Also, the majority of the purchases are delivered and installed on a single installation day (aka “the reveal”) versus piece-by-piece deliveries. This level of service includes additional charges for insured warehousing, and two sets of delivery charges: one to deliver and inspect furnishings at the warehouse and another to redeliver to the home.
3) Some negotiated combination of the above. As with everything else, we pay for goods and services with time or money and this is certainly true when it comes to interior design services.
Ask the Right Question
As you can see, “What will this cost me?” is not an easy question to answer! In fact, it’s not THE question to be asking. The actual question should be “How do you bill for your services?” allowing designers to describe their scope of services and how they calculate pricing. The clients need to provide specific details with regard to their budget and exactly what type of service they are looking for. Otherwise, it simply will not be possible to give a price ... unless a designer charges a simple flat fee to provide a design plan for the space, with no added procurement services and few alterations to the plan.
A furnished living room can be $10,000 or $100,000 and up – depending on what the client wants. Budget is always in the client’s control and ultimately the designer can either accept the job within the stated budget, or choose not to. Contrary to popular belief, designers are not looking simply to spend as much of the clients' money as we can. We want to provide the right services for our clients' needs and in return, to be fairly compensated for our efforts and experience.
Linda Merrill writes for networx.com.
Updated March 28, 2018.
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