Who is doing the purchasing? If the designer then they charge for the time and add a mark up if you want to go shopping and do the ordering then you save the money . I have no idea how your contract was written so no clue as to what is right and wrong. Hourly pay is IMO a bit awkward since what do you think is the pay for resourcing and ordering items I sometimes spend many hours sourcing items and I sure would want to somehow get paid for those hours wether by adding those hours in to my bill or using a formula for charging a fee added to the items I spent time researching. I have no idea what your contract says so no way to really know what is happening.

They are doing the purchasing. I am paying the entire design team an hourly fee for any time they spend on my project, which includes time spent researching and ordering items, as well as tracking them. I am billed separately for the time the senior designers, junior designer, and assistant spend on the project (four individuals). They each have a different hourly fee. The hourly fees are well above average, which I was fine with and agreed to. I did not create the hourly fee schedule. This is what was outlined in their contract.

I firmly believe in compensating people for they time, which I have done. I am paying thousands over the retail price and marked-up shipping costs, so I am trying to figure out if is that customary. My contract states that I will pay the retail price and does not mention marked-up shipping costs. If it were included in my contract then there would be no issue because I would have known about it.

Thanks for your input. Yes, I am definitely being billed for the time spent shopping. This is month 4 of the project and I receive/pay the invoice for the time monthly. It is outlined in the contract.

I am particularly bothered by the added shipping costs because I had many direct conversations inquiring why shipping was so expensive and they never disclosed the marked up costs.

I began to research myself ways to reduce shipping costs. That is when I discovered that the shipping costs had been marked up (a couple of hundred $$ per item) and that I was paying 30-100% over retail price for most items.

If you're sure that the shipping is being inflated (I sell online and shipping prices have gone through the roof!), I would definitely question them on that more. They're not even providing you the service of receiving and inspecting. I worry about that for you. What if something is the wrong size or has a defect and you don't realize it until too late to ship back? Or a multitude of other issues. The responsibility should be on them to insect, especially since they're ordering. It could cause delays down the road. Plus you having to deal with the packaging is a hassle. For the premium you're paying them, you should get totally turnkey service. The design/build team we're working with has a storage unit for each project, and they keep items in there (after inspecting) until the house is ready for it. Ordering mistakes can happen but if shouldn't be your job to figure that out.

My contract:

HOURLY DESIGN RATES: Hourly time includes design consultation, shopping, meetings, calls, drafting, correspondence, budget outlines, preparation, research, proposals, purchase orders, invoices, organization, administrative work and travel time, etc.

Retail Purchases: XXXXXXX will purchase all retail items we have proposed to you. You will be billed the retail rate plus tax and shipping. XXXXXXX keeps the retail trade discount offered by retailers.

Trade Purchases: Trade only purchases are available through XXXXXXXX at net prices from sources in which we have a larger discount up to 60%. Trade purchases of furniture, wallpaper, fabric, etc. made through XXXXXX are charged net price + 30%. We call this a “win-win” for XXXXXXXX and our clients.

It certainly appears that you are not being billed correctly according to the contract you shared.

I am not a lawyer, but that does not seem above board. The 30% over net cost not retail, and the shipping certainly seem questionable or wrong.

What is standard does not matter. What matters is the contract you signed and they signed and whether they are following it or not regarding shipping and pricing.

Regarding them profiting off of discounts and not passing the savings on to you, that stinks. But they were up front about it and you agreed to it in writing.

Show us the actul contract not the interpretation printed out. This is what we go by. You can black out personal info but we need to see the contract I am confused over what the itmes are you agreed to pay + 30% for and what you consider retail.

I did a gut remodel using a designer which included both design of the construction as well as design of the decorative elements - e.g. furniture etc.

Based on my experience including experience of friends who used other designers my opinion is that you are being overcharged. The problem is that the contract itself is structured oddly - not to mention being a bit ambiguously drafted (speaking as an attorney who worked principally with business contracts).

People can enter into agreements on whatever terms they want - assuming they are *legal* but in my experience, designers do NOT charge an hourly fee for *shopping* AND a markup on the items they shopped for. The hourly fee is charged in lieu of the markup on purchases and is intended to *compensate* the designer for the charges like shopping and invoicing - in effect - your designer is double dipping because they are charging you for the services in the first paragraph which are intended to be covered by the markup.

However the problem is that you agreed to this arrangement which - at least based on my experience - is not standard in the industry.

In my design contract I was charged a markup of 20% for new purchases; 15% for "specialty construction" (e.g. custom cabinetry and tiles). My contract did contain a provision for hourly charges but this was explicitly stated to cover space planning - e.g. using my existing furniture elements. In practice I was not charged any hourly fee for the "design" plans which incorporated some of my existing furniture.

My designer did a lot of the legwork and we also did a few joint trips to the Pacific Design Center. I also did a bit of "independent" looking and I would send stuff to her for her input. For example I located my bedroom sconces on the internet and she agreed that they were perfect. She ordered them using her trade discount with her markup. I wasn't charged a separate fee for any of her time. If she brought me swatches or samples I wasn't charged for the time spent searching for those even if I didn't order the ones she showed me and she had to look further.

In general - the net cost to me was less than what the price would have been if I ordered directly. For example, I ordered the Emilio Accent Table by Arteriors which retails for $1055 per table. The charge to me was $389 per table plus the 20% markup so I paid only $467 total including her design fee. I was never charged a markup on shipping and the services included her unpacking and checking and placement.

I have a custom rug in my living room and we went to the store where she designed it and supervised everything - for example. I was charged only the cost of the rug plus her 20% design fee. I mention the rug specifically because the owner of the store had questioned whether he should include me on his invoicing and she told him to do so because she was completely transparent in terms of her pricing and invoicing to me. I paid what he was charging plus her design fee - no secrets.

Her invoices were completely transparent and I was never charged a markup on shipping whether it was shipped to me or shipping to her company.

@Helen Thank you for the info. Very informative. I was fine with the hourly fee and mark-up compensation as long as I was paying the retail price as stated in the contract. I became concerned about the undisclosed shipping mark ups and when I realized that I was paying well above the retail costs. Transparency is important.

@Patricia Colwell Consulting That isn't my interpretation. It is what the contract states. The only thing I edited was the company name. I know the difference between "retail" and "to the trade." My questions have been answered.

@stiley Very good points about the potential problems that can arise with inspecting and receiving the items myself. It is not what is outlined in the contract, nor what I agreed. (But there is no need to discuss that issue further. :-/) Yes, they are inflating the shipping costs. After I asked them about it, they admitted that they were marking up the shipping costs, but told me it was "standard practice."

I hired a designer when I built my custom home a few years ago.. I was paying by the hour, but during the process I discovered ( accidentally BTW) she was marking everything up over retail plus keeping the discounts. By everything I mean the furniture, shipping costs, labor, wallpaper, you name it, she marked it up, That's why I will never hire another designer.

@bichonbabe Sorry this happened to you. I also discovered it accidentally.