Interior Design Fee Structures | Complete Guide

In this series of posts I’m covering interior design fee structures, what they are, when to use them and the pros and cons of each. Please note that this is part of a series of posts about this topic as I want to ensure that you have all the information you need to price your interior design projects accurately. You can download the worksheet and also read the blog posts here: www.idbs.online/interior-desi...
Interior Design Fee Structures I cover in this video are:
- Percentage Based Pricing
- Hourly Rate Pricing
- Price Per M/2
- Lump Sum / Fixed Fee / Package Pricing
- Day Rate
- Cost Price & Markup
- Value Based Pricing
- Time Boxing
- Retainer
- Phase Pricing
- Combination Pricing
- Bidding
- Pricing Per Room
- Sliding Scale Pricing
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[@DannyBoy89]

I have charged fixed fee in the past & has never worked out for me well. Projects have gone months overdue, I’ve spent wasted time without being paid & Ive undervalued myself at the begining. I think doing staged pricing is best. Deposit/retainer straight up (that’s a fixed price for all projects) & then charge the design fee & then another fee for procurement of FF&E (mark up then) & project management. However depending on size of projects - if it’s large scale i would charge an hourly rate for managing it & then for styling at the end.

[@interiordesignschool]

Hi Danny, thank you for taking the time to write! I totally agree, that's why fixed fee typically only works for small projects (I made this mistake at the beginning on larger projects too). I think it's interesting that you pay a fixed price retainer, is that because you work on similar projects that are typically the same price or because you use this as a type of mobilisation or security for FF&E sourcing? Project management I personally also price per hour, it varies from project to project and depends on the quality of the builder, experience of the client and so many other factors it's not worth the risk to price it any other way for me. Thank you for joining the chat!

[@DannyBoy89]

@@interiordesignschoolHi Jo no worries I find your content very inspiring & informative. So the fixed fee is based on I only work on local-ish projects & Nothing too big (I.e more than 2 or 3 rooms at a time) and so to cover my petrol & first consultation which lasts 2 hours I charge between £200 - £250 based on my skills (I’ve not had many projects). So that works for me because I won’t feel I’ve wasted those 2 hours if they don’t hire me cos I’ve been paid. Im very strict on timelines & my working policy so that fixed retainer doesn’t change.

[@interiordesignschool]

@@DannyBoy89 that makes total sense! Thank you for sharing! Let me know if there is anything else I can cover in regards to fees and I can try to add it into the next few posts on the topic, have a great day!

[@interiorpm]

very nice 👌

[@interiordesignschool]

Thank you!

[@ajosejem]

Hi Jo, I would like to hear more about phase pricing. My fee structure is flat fee fee Plus Cost Plus Markup for FF&E.

[@interiordesignschool]

Hi Marilyn, sorry for the delay in getting back to you. I have decided to do a KZbin live about pricing, so stay tuned, I have decided to start doing one live per month on here, let me know of any other topics you would like me to cover. x

[@annaoslo8650]

I have heard that some designers ask for kickbacks from other trades or the contractor hired. Often between 10 and 20% that is a referral fee added to each invoice. Is this common practice and understood to be the designers fee like for furniture sourcing?

[@interiordesignschool]

Great question! The following is without prejudice: There are two ways to earn a referral fee depending on whether you act as a principal designer or agent. Suppose you're acting as the agent and get a referral fee (acting as an agent means the client buys the items or hires the people you've proposed but not through your business; they hire them themselves with your guidance [this is actually a great way to work because there is much less legal responsibility and trouble you can get into). In that case, you must disclose any money you receive upfront or else it's seen as a conflict of interest (the client hasn't realised that you're getting paid to refer them). In the same way, an influencer needs to disclose whether they're getting paid to say they love a product and you should buy it. If you're acting as a principal designer ([this title has various meanings], but in this context, I'm referring to the way you source, taking money from the client and distributing it to all of your staff, trades and suppliers). In this case, you don't have to disclose your relationship or profits because they're your team (just like a shop wouldn't disclose its mark-ups). This is why setting your fees and understanding legal payment terms is imperative as an interior designer. I hope this helps x