If you’ve ever looked around for interior designers’ prices, I’m willing to bet you’ve come up empty handed.
You might wonder if there’s an industry-wide agreement to keep our fees quiet, but I promise you there’s no such thing. The reality is that the cost of an interior design project varies drastically from one to the next and depends on hundreds of moving variables.
But you know me… you asked, and I’m not one to back down from a challenge. 😉
Today, I’m walking you through some of the most common pricing structures out there and some tips for working with each on your project. Yes, it’s going to get a tad technical, but if you’re going to invest in your home, I think you should know exactly what you’re getting into!
PRICING STRUCTURE 1: HOURLY DESIGN FEE
An hourly design fee is most common in residential design. Simply put, you are invoiced directly for the design hours that are put into your project. (Remember, this does not include your furnishings or labor investments.)
This hourly fee is likely to be combined with markups on products that the firm sources from its vendors. Markups are a fair exchange for pre-vetted, often exclusive vendors. Plus, the prices are likely to be the same or lower than if you acquired the same item yourself in retail — if you can even find it retail. (You’ll also find that a lower hourly fee usually corresponds to higher markups.)
THOUGHTS ON HOURLY DESIGN FEES
This structure is the most straightforward way to charge — fees go up or down in direct proportion to the time and energy your project requires. The structure also leaves the most room for the designers’ creativity, where you’re given options and able to choose the direction that fits your investment best.
PRICING STRUCTURE 2: FIXED DESIGN FEE
Fixed design fees are the ones you’ll see most often on commercial projects, though I’ve seen them in residential too. If you find a designer with a fixed fee structure, you’ll want to make certain that the scope of work is well determined in advance and is adhered to. Know, too, that many firms will also build in a buffer as high as +25% or more to cover unexpected expenses.
With this fee structure, payments are made in agreed-upon increments, usually monthly or in stages that follow the firm’s deliverables. There is also likely to be markups on any purchased products in which your designer is acting as your agent.
THOUGHTS ON FIXED FEES
With a fixed fee structure, eyes are constantly on the design hours and working within the time constraints. This means fewer re-selections for furnishings/materials, potential missed design opportunities, and decreased client participation. Not always, but it’s possible.
PRICING STRUCTURE 3: PERCENTAGE OF BUDGET
Some designers may also bill for their services as a percentage of your total budget. Designers with this structure usually have a sliding scale, with percentages increasing or decreasing with the scope of the project. Makes sense, as an increased budget will drastically increase the amount of design work required.
In this scenario, the design firm takes on most of the risk if issues arise (though issues are normal), which is why they’ll usually request a refundable retainer around ~10-20% at the outset, then lump sum increments to follow: ~50% at the start of the project, and then ~40% at signoff and orders, then paid in full prior to installation. You’re likely to see product markups in this structure, too.
As in the last two pricing structures, there is also likely to be markups on products that the designer purchases on your behalf.
THOUGHTS ON PERCENTAGE FEES
This fee structure requires larger lump sums, which can be more or less desirable based on your situation. However, I think the percentage is a nice way to set a budget and focus on creating your best possible result without getting caught up in counting hours.
PRICING STRUCTURE 4: PER SQUARE FOOT
Yes, some design firms will charge their service fees based on your project’s square footage. This structure is also usually on a sliding scale with project minimums. I’ve even seen some of these “square footage fees” with the products included. (Versus markups)
You’ll find this pricing structure most often in show homes or new builds, and you’ll usually pay up front or in phases, depending on the designer.
When furnishings and products are included in the design fee, you’ll also find less participation on your side… the designer may limit you to the vendors where they receive pre-negotiated discounts.
THOUGHTS ON SQUARE FOOTAGE FEES
Honestly, this fee structure isn’t my favourite… it may have you looking at some pretty big numbers, as you’ll often pay up front. Plus, whenever you’re limited on selections and creativity, I think it’s a missed opportunity. That said, I know this structure can work for people, so if you’re happy with these things going in, then I say go for it!
WHAT IS LBI’S FEE STRUCTURE?
In case you’re curious about us, we go by Structure #1, the hourly fee. We’ve found it to be the fairest trade for the work that goes in, whether you have a small project or a large one.
We take a retainer at the beginning of your project to indicate your commitment and allow us to turn down other work while we have your project on our board. These funds are held until the end of the project, and when it’s complete — we write you the cheque!
Like many hourly service professionals, we track out time daily, have different rates for different team members and tasks, and invoice monthly. We mark up product and share any insider discount over 10% with you. Because we have a tight process, we are proactive and efficient on projects and move through them quickly.
In other words, we won’t drag your project on unnecessarily. We want to complete it as much as you do — you have a home to enjoy, and our next project is waiting for us!
There is no right or wrong fee structure. Designers will charge based on their experience, what they think is fair, and what’s going to work for their teams.
My only advice is to make sure — no matter how your designer charges — that you have a signed agreement up front and you’re very clear how they invoice. This will set a clear path for a successful and enjoyable project!
I hope you feel well-prepared to choose and navigate the structure(s) that will work best for you. Any questions — send them my way!