Trade discount is for trade, not the client, and mixing the two is unfair to all parties, says Vanessa Brady, interior designer and president and founder of the Society of British Interior Design
Interior designers have often passed trade prices on to private clients as a pricing tool to clinch commissions, and by so doing they inadvertedly undermine our profession. Designers need to support manufacturers and retailers, not undercut them. Passing on trade prices to consumers to make the project cheaper for the customer is inherently wrong.
If, for example, we as professional interior designers achieve 25 per cent trade discount on a product, then it must be that the consumer cannot be given the same discount from the retailer, such as John Lewis. The consumer also cannot insist that we pass on the trade discount to them.
This is linked, of course, to the way in which our industry charges for design services. All designers should be upfront and transparent about their charges and, like other professions, charge an hourly or daily rate. They should not use product specification to cover their design fees. In other words, to offer a free design pitch anticipating that this product specification will cover the designers’ costs is no good for anyone.
We strongly advise our SBID members that a) they charge for design services at the outset and b) they don’t pass on the trade discount on products to customers.
Having said that, our designers are supported by the SBID to promote their services but it does not advise, direct or propose what the fees should be. We are not partners in business: we are a body promoting and setting standards to enable professionals to trade professionally across the industry, whether the service provided is retail, trade or simply good practice advice.
So to protect retailers and manufacturers, we need fair play from ourselves. Let’s remember that retail prices need to be high to offset the considerable costs of stock, staff, showroom, training, delivery, customer services and so on. Trade prices are for products supplied on business-to-business terms. Interior design has until now rarely respected the difference.
Designers with trade accounts have used their trade price as leverage to obtain work by sharing this discount with their clients, but this practice eats into the profit of retailers who will then squeeze the manufacturers.
In contrast, as a trade account supplier, the manufacturer simply processes a purchase order received from their trade account holders. Often no conversation takes place at all. The stock delivery date is frequently registered to one address only, no staff interaction is required, no stock is held, and regular trade accounts provide the supplier with a regular sales order. So the discount is deserved.
Trade discount for the manufacturer is also appealing with the designer taking on the after-sales service. In return, the trade customers (designers) return regularly to buy, as opposed to a consumer customer who is primarily a one-off purchaser. The cost in retail to achieve constant customers as opposed to returning customers is high. You can see the appeal of a trade account, so I have never understood why some interior decorators and designers sell on their trade price to potential clients.
The designers and decorators who do cause serious damage to the industry: they undermine the retailers‚ position, they betray the supplier, and shoot themselves in the foot with their foggy areas of charging for their design services. This has done much to bring the professional interior design services into disrepute.
Selling out damages everyone. No other profession would, or does, provide their trained service free of charge. It is unprofessional. Perhaps it is why residential designers have never been held in high regard by industry?
This article was first published in idfx Magazine.