How & Why Luxury Interior Designers Charge for their Services

rterior studio west hollywood film reel and scissorsIn the beginning stages of any Hollywood blockbuster, you’ll find a hearty crew of people contributing ideas, sharing inspiration, and finding the common thread that will turn into what they hope is the next high-grossing box office hit. As passionate cinephiles, all we see and hear and experience is the final product…but we know there is so much more that goes into the production process than what we witness on the big screen. 

Interior design is no different. 

Sure, as the client, you might simply make the hire and then sit back and enjoy your luxury interior designer’s turnkey process and white glove service, only truly seeing the brilliant results at the time of the final reveal. But a designer’s job is so much bigger than fluffing pillows, shopping for pretty decor, and bringing a smile to your face.

In your designer, you’ll find…

  • A confidant who listens to your deepest desires and finds inspiration in your hopes and dreams. 
  • A miracle-worker who takes the feelings you describe and turns them into a comprehensive design plan. 
  • A friend who cares about how you spend time with your family. 
  • A project manager, dreamer, and doer who takes all of that information and processes it to create a storyboard of what life in that space can actually look like. 
  • A producer and editor who fine-tunes the story to craft a narrative that pulls on your heartstrings and helps you fall in love with your space all over again every single day.
  • And most importantly, 1-on-1 care and attention from the moment we first meet.

And that is just the beginning… there is oh-so-much more!

Together, let’s take an in-depth look at what a designer does and how we charge for these specialized services. In the next several sections, you’ll discover:

  • What really happens behind the scenes of a design project
  • The ins and outs of product markups
  • The pros and cons of various interior design fee structures
  • R/terior Studio’s fee structure

Let’s go!

What Really Happens Behind the Scenes

As they say, it takes a village to make a movie. The director, producer, costume designer, hair stylist, make-up artist, lighting guys, camera crew, assistants, assistants of the assistants, etc. – all of them combine to make movie magic together. 

And along those same lines, there is a lot that happens behind the scenes that allows a designer to bring the magic into your home! There is a full cast of furniture and decor, a crew of people focused solely on your space, a thoughtful process that gets us from where we start to where we want to be – which is head over heels in love with the place you call home.

The biggest part of the process that you’re not privy to as someone experiencing the final reveal? (Or the premiere, in keeping with our movie metaphor.) PROCUREMENT!!

rterior studio west hollywood natural mood board

Procure-what?!

You see, once we have a story board developed and agreed upon for your project, then production begins. This is all the stuff behind the scenes that you, as the client, never have to worry about. This is where all the heavy lifting happens…the hours spent sourcing, the late nights bringing a vision to life, the countless revisions to the final design that will make it simply perfect for you. 

This procurement phase is 50% (or more) of the work in any given project. Let me explain…

After I have dissected your inspirations, created concepts, and turned those into detailed designs, there are so many factors at play that are constantly swirling around in my mind as I begin to source your furnishings…

  1. First and foremost, am I staying on budget with our agreed upon investment?
  2. As the client, are you someone who likes options and wants to see a couple choices for each piece? If so, this takes me even more time to find items in varying styles that meet all of your requirements.
  3. Am I complying with the look and quality you are hoping for?

And then once we have selected your exact pieces, then begins this whole epic journey of placing orders, checking availability, confirming lead times, expediting custom items, inspecting each piece for damages, requesting replacements, negotiating prices, scheduling deliveries, and more! 

Seriously…it’s A LOT! And this hasn’t even scratched the surface of hiring and managing any necessary trades leading up to the final install. Whew! (Feeling exhausted? That’s why you hire a professional to do it well for you!)

Impact on Overall Investment

In a nutshell, procurement covers product purchases, implementation, hiring trades, fabrication, the logistics of getting products to you, and the installation and placement of all items. All of this takes time, especially the project management piece where I’m acting as the middleman between tasks and people and putting out many, many fires you will never have to see.

ALL of this goes into what interior designers, like myself, charge. Sure, the design phase may take a mere matter of weeks, but after that, 3-6 months is filled with procurement, project management, and so much more…and although I love you all to pieces, I simply can’t do all of that leg work for free. 

It is very hard to put a price tag on creativity, and as designers, we are offering our creativity as intellectual property. Then, in order to execute that intellectual property, we give you dozens and dozens (sometimes hundreds, if we’re working on a whole home) of hours of our professional time and effort. 

The Ins and Outs of Product Markup

I recently read an article in Business of Home magazine that conveyed exactly what I’ve been thinking and experiencing over the last few years…

The author said, “The [designer’s] purchasing fee is like going to the store: You don’t go to the store and buy things at cost. There are margins in the product to cover brick-and-mortars, insurance, and all of the things that go with it…”

You see, I’ve been getting the same question and making similar statements in reply for years. People come to me and say, “Oooh, as a designer, you must get great discounts, so can we expect to pay those discounted prices?” 

After squelching my internal agitation and suppressing an eyeroll (sorry, but it’s true), I reply with, “Well, when you go to Crate & Barrel, do you go up to the cashier and say you will only pay for the actual retail cost and not their margin?” 

rterior studio west hollywood paint and fabric swatches

Or, I’ll say, “Imagine it’s 100 degrees and your AC breaks down, so you call for a repair guy. He charges you $500 for 1 hour of work to get the AC going. Would you ever negotiate that amount with him? No! Because he did a service that helped bring you immense comfort in your home. Right?!”

So, I’m going to be a bit blunt for a second…if you are one of those people who is reading this thinking, “What is the point of hiring a designer if I can’t get those discounts?” Well, then hiring a designer probably isn’t for you. And that’s okay! 

When I work with clients, I want them to understand that product markup isn’t me trying to scam you out of money or take anything from you. Absolutely not. I’m offering you a service and my intellect that will, in turn, make your space beautiful and tell your story in a unique way.

As designers, we get discounts so that we can markup the products in order to make a profit in our businesses, not to get rich quick, but to keep ourselves afloat and continue returning to those vendors with our fabulous clients. The discounts we receive are a benefit of the time, energy, and effort we put into sourcing furniture from those manufacturers. Those discounts are KEY to profitability in our businesses, which means we can keep serving more people.

Besides, even if we do get discounts, many of the vendors we work with are trade-only, which means you can’t purchase the item without a designer anyway! (And because the pieces are such high quality, the sale price is still extremely competitive with what you could find in retail for lesser quality.)

So if it helps you to think of that markup as the cost of exclusive access to high quality goods, go for it. 😉 

Last but not least, when you’re paying for a luxury professional service — like interior design, getting a bespoke suit, commissioning a piece of art — you need to value the time of the professional, trust that they are taking exceptional care of your home and your budget, and appreciate that you are paying for someone to literally spend days and nights thinking, dreaming, living, and breathing your project in an effort to make you as happy as you can possibly be. 

THAT is what you get for FULL SERVICE INTERIOR DESIGN. And it is worth every penny IMHO…

The Pros and Cons of Various Fee Structures

rterior studio west hollywood woman with laptop on sofa

While every designer may charge slightly differently for their services, here are a few common models in our industry, as well as what I see as the pros and cons of each…

Fee Structure: Hourly Design Fee + Markup on Product

Pros: As a designer, you know exactly how much time you are spending on a project. The client can review the hours line by line – and probably make decisions more quickly because they know they are paying by the hour. The markup on a product might be a set percentage or can vary based on how much of a discount the designer is getting (all vendors or wholesalers offer discounts at a different rate ranging from 10% – 35%). 

Cons: The client never knows how many hours they are going to get billed each week or month, and that on its own can be dreadful for the client…and frankly, for the designer as well when they are presenting the hours. (Yes, on several occasions I’ve experienced clients who question the amount of time spent on sourcing a lamp and think it was “not needed”…which just leads to resentment and an unhealthy client-designer relationship. Eek!

Plus, like I said, I literally think, eat, dream, and live your project. How could I charge you for the incredible idea I had for your project while cooking dinner for my family? I can’t. Which is why billing hourly is not my fave.

Fee Structure: Fixed Cost Per Square Foot 

Pros: This is a very simple and clear way to charge and is most commonly used with commercial projects. But recently, many designers are also implementing this with residential designs, because it eliminates any ambiguity in regards to the fees and can help the designer charge a flat fee up front. 

Cons: Depending on how much the designer charges per square foot, the project management element can get lost. If the price per square foot covers both the design fee and project management fee, then that is great, but can give the client complete sticker shock up-front. 

Fee Structure: Flat Fee Based on Projected Hours Spent on Design + Project Management + Calculated Square Footage

Pros: The fact that it is a flat fee can give a sense of relief to the client, as they know up-front how much their project is going to cost. There are no surprises at the end, since it is all-inclusive up-front. The fee is calculated not just based on one factor of design time or square footage – but takes it all into account together. 

Cons: Sometimes the project may take a bit longer than anticipated, especially if the client is indecisive, and those hours may not be accounted for in the initial flat fee. But if that happens, the issue can be addressed with the client and billed as additional hours exceeding the initial estimate. (Stated in the contract, of course, no surprises.)

R/terior Studio’s Fee Structure

rterior studio west hollywood designer looking at book on velvet sofa

Personally, I have always hated hourly fees for any service, especially when I have no idea how many hours it can take to complete the job. The stress of opening the bill and seeing the hours always increases my anxiety. So, when starting my business, I figured that if I did not like being on the receiving end of an unknown hourly bill each month, why would I run my business that way?!

Plus, to be fair, I hate tracking my own time and hours as well. Maybe it is a “creative person” thing, but tracking the number of hours it takes to find that one gorgeous rug or lamp that literally pulls the entire design together is just not something I believe in. If I want to be true to my craft and fully authentic to my design, I will spend all the time I need to find that ONE piece for my client. And that is on me, not them.

Design is also so organic for me that I find it difficult to track my time and charge hourly. Since I’m always working on multiple projects at a time, I may get an idea for one project while I am sourcing something for another and decide to include it and then come back to the first one. See how that makes things complicated?!

With all of this in mind, I use the last model I mentioned – a flat fee based on projected hours, project management, and calculated square footage. It has worked well for me for years, and I appreciate that it gives me the flexibility I need to be creative and not confined by time — and I know my clients appreciate the upfront clarity and flexibility as well. 

That said, of all the fee structures I mentioned above, I have to admit that no one way is correct. Each designer should do what works best for them. And frankly, I am still fine-tuning what works best for me, but I do know that I believe in my method and know it is genuine and authentic. I give 110% to every single project, whether it is decorating a small room or a ground-up renovation. There is a lot of heart in each project and that is one thing I’ll never compromise on. 

So, when you’re ready to hire my team to transform your space and change your life, let’s chat. All I ask is you TRUST in me and my choices and believe as strongly as I do that the end result will be a home you absolutely LOVE!

What are you waiting for? Let’s tell your story together!

Cheers,
rydhima brar principal rterior studio west hollywood LA bold eclectic interior design firm