What happens when your interior design clients want to see invoices for the products you so carefully picked out for them? At Pearl Collective, we believe in empowering the designers that we coach to be paid what they’re worth. And that includes a fair markup on the products you spec for your clients. So, when you get this question, do you show them just because you’ve been bullied about it in the past, or feel obligated to?
The Importance of Purchasing
Markups are an extra cost that you add on to products that you purchased, to cover the time and effort spent on picking out the pieces, plus to ship them and store them. They are a necessary part of making sure that you get paid fairly for your work. But often, clients will get the impression that they could simply order online for market price, and not have to deal with your markups.
But the upsides to purchasing on behalf of your client are numerous. For one thing, a rogue client could purchase a piece on their own that simply does not fit in with the design you have handcrafted. The final result could reflect poorly on your skills as well as turn out poorly for the client. It is also a benefit to the clients to handle ordering through the firm. This means that you can handle any returns or exchanges and not have to bog down the client. The time this might take is all worked into the markup cost.
Learning to Say “No”
The simple answer is, no, you should not share your invoices with clients. We encourage you to have specific language ready to deal with this question. Here is how to explain your perspective.
Have the Conversation Early
First of all, it’s important to have this conversation early on in the process, and as often as you need. Let your clients know that you make money in more than one way. The first and most obvious way is when you create a beautiful space for your client and get paid for your services. But the secondary way is by charging a markup on the items you purchase on their behalf. Communicating about this upfront helps to establish trust and is crucial to a good relationship with your clients. And you need to establish trust by proving that you’re an expert in your field. The problem will never come up in the first place if the client trusts you to handle the purchasing process. This is why it’s important to have a unique value proposition, so that you are hired for more than just your pricing.
When the Problem Comes Up
If you get this question midway through a project, there are a few ways to smooth this over with your clients. And the explanation is simple. You found, envisioned, sourced, purchased, stored, and installed any furniture and materials that you purchased for the project. And you deserve to be compensated for all of that work. A markup is not senseless greed – it’s simply a cost of doing business, which you must pass on to the client in some way. If it’s not a markup, perhaps it would be a sourcing fee, an invisible increase in your rate, or some other way. Be sure to communicate all that goes into ordering a product including when it comes to holding onto and storing it. Explain how much work goes into this process, and hopefully the client will understand.
At the end of the day, no one asks a chef how much the raw ingredients cost. Certain costs need to be baked in to the process in order for you to make money. Understand why markups exist, and you can defend them when necessary.