Designers traditionally charge a few different ways and some designers even charge a mixture of these ways. Below is the most common ways designers charge, and then we will get into why we charge flat-rate pricing.
Interior Design Services & Types of Fees AppliedThe fees/rates employed for interior design services are quite are as follows:
- Pre-fixed rate
- Hourly rates
- Percentage over costs
- Costs per square metre or square feet
- Department store retail
- Combination rates
1. Fixed Rates
Fixed rates are by far the most uncommon way. The reason why is because majority of the time the designer will actually be doing way more work than what is expected- all for the same cost. There should be (from your designer) a clear and concise scope of work to leave no room for errors or interpretation.On fixed rate the designer may charge an initial 10% to as high as 50% of the initial cost. The reason for this is because of the amount of hours required to even get you (the client) your first set of deliverables. Hypothetically saying that you cancel the agreement right before the deliverables are met- the designer already has money from you to cover the initial stages of the design, and would then (depending on the agreement) refund you the remaining amount.
2. Hourly Rates
A popular mode of payments, the hourly rate payment method has been used over the years by many professionals such as architects, engineers, therapists, lawyers and accountants. It is well used by interior designers too. There is, however, a huge problem with hourly rates. Setting aside the fact that some designers charge as high as $250 an hour, the issue with hourly is that the designer can take their sweet time- especially with clients who are taking their time making a decision. Using the $250 as an example: Your designer could have taken their time to perform CAD drawings – normally would have taken them 3 hours took them 6 hours because you took your time making a decision on how high you wanted you cabinets. You do the math: on a normal day the designer would be charging you $750 for that CAD drawing- but when you took your time they decided to charge you $1,500 and you can’t argue their work. That is what you agreed on. There is a huge issue about ethics with hourly rates and whether or not your designer is accurately keeping track of their time they use and even more so being honest about that time being used! You dont want to spend $250 for an hour when your designer spent 30 minutes of that hour picking up their child from daycare.
3. Percentage Over Costs
This method is great for residential projects, though it may be used for commercial projects as well. Charges are the net or wholesale prices that the interior designer pays to the merchants, vendors etc.., and then a predetermined percentage mark-up is applied to the net cost.
The mark-up is on the furniture, furnishings and labour incurred whilst working on a client’s project. The actual net cost is paid to the designer plus a commission which is inclusive of design and planning, selection, delivery and installations. This type is super fair- as the designer is only making money off of what you purchase from them. The catch is you must purchase from them. They make no fees off of just hiring them because they EXPECT you to purchase from them and not shop yourself. This type of payment structure is more popular among the older designers who have been in the industry for years and years.
4. Cost Per Square Metre/Square Feet
A very simple way of charging that is commonly used for space planning tasks and is usually a small amount per square metre or footage. What it entails is the interior designer simply measures the client’s space to determine the square metre (or square footage) to be designed. Then multiply by a pre-determined and mutually agreed amount. This type of payment is more common with commercial designers and rarely used for residential projects.
A method commonly associated with residential interior design projects; this was the traditional mode of payments applied some decades ago. This was before interior design became designated as a profession before the mid 20th century. Later the interior design study started to include complex technological services (electrical, lighting, etc…) for complete interior design projects.
6. Department Store Retail
Many department stores that retail home furniture and furnishings also offer interior design services. These services are usually provided free as long as a stipulated minimum number of items are purchased. In some cases, a fee may be charged for services, but if the purchase exceeds a certain amount then the charged fee is refunded.
7. Combination Rates
This billing method is advised if working on a large project and a complex one. The initial works of space planning can be charged per square metre (or square footage), at a pre-fixed or an hourly rate by the certified interior designer.
Why we charge flat-rateThe founder of Studio Tumo was always put off by the designers who are doing this just for the money and only had money as their primary focus. We charge flat rate for a few reasons:
- It givers the client more money to play with and purchase furniture with.
- It allows us to stay ethical, and not make it where we would charge more for picky clients. Not that we would do this- but it completely removes the “possibility” factor when billing clients.
- It allows clients to trust us more- we are designing their space for X amount of dollars. Nothing more, nothing less.
- Easier on us: We dont have to track time. I mean- we do but only on an internal level. This allows us to focus more on our clients and our projects.