Have you ever had a client who tells you that if they hire you they want your wholesale discounted pricing? What they are asking is to have you to design the space and sell them the entire product offering with no purchasing fee.
No way…
Yes, way… It happens all the time. These clients are thinking that the perfect sofas, rugs and lamps that you select just fly out of the sky and land in their living room. But we know that is not even close to reality.
There is a way to handle this situation and keep your profit and integrity intact. Simply charge 30% of the total furnishings budget for your purchasing fee (upfront) and sell your client all the furnishings at wholesale. This is a viable way to structure a design job. Everyone, including client and designer, gets what they need and want. This works well for everyone, but perhaps is not the easiest fee to sell to a prospective client.
The core of this issue is that the client doesn’t understand how much time, energy and effort goes into the purchasing phase of the project. Many clients will question your 25% or 35% purchasing fee when it comes to higher ticket items by saying “Why do you need to make $1,500 on my sofa? It can’t be that much work.”
The answer is that it actually takes a great deal of time to get product ordered correctly. Beyond that, your client needs to know that an item that cost $350 (say a custom shaped teak bath mat) can easily take 4.5 hours to be correctly ordered, and that you make $87.50 on it. The higher priced items balance out the low cost time eaters.
You need to be clear and confident about explaining to your client the value of the services that you provide in the purchasing phase of their design job, or give them the option of doing the purchasing themselves.
Here are three tips to help you establish your value and clarify your offer to design for your potential client. Read on in my Blog.
Tip #1 – Early in your initial interview with a potential client be sure to ask, “Do you enjoy researching and buying products on the internet? Will you be doing the purchasing yourself or do you want me to take care of all the details?” If they want to, and enjoy purchasing, that is fine.
You just need to account for that in your offer for design services so that you are appropriately compensated. Completing the design and providing a specification sheet with all the detail needed including a link to purchase takes quite a bit more time on your end.
It is up to you to get clear with your client about what services they want, and how the purchasing phase will work before starting the job.
Tip #2 – When purchasing is part of your letter of agreement, be prepared. Create a list of all the little things that you do when purchasing product, and memorize it so that you can talk confidently about this process.
Start with making sure that the purchase order is correct and that it includes all of the details: sending the order to the vendor and receiving the acknowledgement, checking the acknowledgement to be sure that all the details and pricing matches the original purchase orders, and that the items are going to ship in the appropriate time allotted.
Don’t forget these details too: Researching replacements of back-orders or discontinued products and researching and arranging for the best freight carrier possible. Setting up the receiving warehouse for check-in and inspection of product and checking any for damage issues. Contacting the vendor or the freight carrier to resolve damage issues. Following up to be sure that replacements are ordered, or authorization has been granted to hire a refinishing expert to insure that the product is delivered in the best possible condition to the client. Set-up the delivery appointment for all products and making sure that every item is on the truck so that the reveal is flawless.
And then there is the product liability that you are responsible for because you are the one that placed the order.
Need I say more? You can add to and embellish this list, you know what you do!
Tip #3 – Learn to develop a budget with your client “on the fly.” This means that you are talking about money and have an agreement about how much the client is comfortable spending in the first initial interview, period. There is no way to make an educated offer that serves the client and protects yourself without this information upfront.
To learn how easy it is to get your client to agree on a budget at the first appointment, you need my training called: “Designing for Dollars: The Secrets to Winning Over New Clients While Doubling Your Income.” You can find it on my website, go to www.DesignBizBlueprint.com then go to the TOOLS tab and read about this 7-CD and training book. This training is included in our end of year 40% OFF TOOL SALE, so look for the email coming your way just after Christmas.
