Question for Interior Designers - do you get kickback from suppliers?

Question

I am currently living overseas and working as an Interior Designer.

A couple of weeks ago I took a client to a showroom to pick out tiles, a new bathtub and sink, and a few other products for her home. The clerk who helped us out wrote up a list of items that we had chosen and said that he would email us a quote on the whole package.

Then, he pulled me aside and whispered, 'And of course you will be receiving a 10% kickback.' I was shocked, so I spoke to other designers here that I know and they told me that this is standard practice. Businesses and carpenters always give a 5%-10% kickback for referral.

Needless to say, I am really happy about this. But at the same time, I feel a little guilty taking the money. The client is already paying me for my service. Also, the showroom clerk told me that I have the option of applying the 10% as a discount for my client instead, so I kind of feel like she is being charged extra so that I can make more money.

Okay - here are my questions for the Interior Designers out there:
1. Is this practice common in the US (or other countries) as well?
2. Should I take the money? Please help me decide!

Thanks,
Daina

KMS Woodworks · Answer

I'm not a designer per se but more of a contractor who dabbles in design.  I have know many other contractors to charge a client a 10 to 15 percent 'premium' for materials.  I have never bought into this extra 'fee' and simply charge my clients actual material costs.  If these materials require me extra time to pick them up / sort hand pick etc.  I do charge them for my time.

Some suppliers will discount products sold to contractors...which is a bit like a kickback.  To me the price of the product is not the most important thing...it is quality and selection.

The far bulk of my clients evolve into what 'feels' like family.  The back and forth trust is something I take pride in.  Would I take a kickback on purchases for an actual family member...NO.

My advice would be to ask yourself....do you feel you are being fairly compensated for your 'services' by the client?  if so, pass on the savings to them...it could only help build your relationship with them.

Woodbridge Environmental Tiptophouse.com · Answer

Its not really a kick back. Its a professional discount. Most contractors who go to companies for supplies get professional discounts such as this.l The norm in our area is about 20% off of the retail price. When shopping with the client they will never quote you your price, and most will not give you your price unless your paying for it directly. They will not mail you a check for the difference. Its then or forget about it. 
Depending upon how much I want the job, which is most of the time. I discount the materials to a point to my clients or at least a part of that discount.

N C · Answer

It's  like a finders fee. Take it. Why not?

Daina S · Answer

Thanks for the useful info everyone.

@Woodbridge and @KMS, I don't think that  this is the kind of 'professional discount' that contractors get from suppliers. It's more like a finder's fee, like N C said. They are paying me as a way of encouraging me to bring them more customers, not discounting an item that I purchase from them.

KMS, I like what you said about 'Am I being compensated fairly for my service?' You are really forcing me to be honest with myself. On the other hand, there's that voice in my head that says, 'Everyone takes it - why shouldn't you?'

I'd really like to hear from an interior designer - anyone out there in Hometalk Land?

KMS Woodworks · Answer

I did some work for a client yesterday...getting a new faucet installed and reworking the new sink drains, disposal etc.  After finishing up I gave them my 'hours'...for the work I did.  They replied that that did not seem like enough...I know this client is an avid shooter and gets promotional deal on ammo and all kinds of other stuff....I suggested if my fee did not seem like enough he could 'throw in' a couple boxes of 9 mm ammo.  Shortly after that I was heading out the door with a check and 100 rounds of Winchester 9mm....it was a win win for everyone.

The bottom line is compensation can take many forms.

Sharron W · Answer

I like what KMS had to say in the beginning, frankly if you're new to the area and the culture it may very well be true that 'everyone' does it. In some industries doing business overseas 'Bribes' are actually built into the price of projects, but that doesn't make it honest and many industries are trying to break that cycle by refusing to do business in that area unless it's accomplished with out the forced 'tip', You have an opportunity to make a real success of your business by word of mouth after your 'customer' tells his/her friends how you negotiated them an extra 10% discount...and at the same time lining up people that will want to help you succeed by supplying you hard to find items if and when you ever move back...In the long run I always believe doing the right thing pays, if not today then tomorrow. My standard for moral character, (in myself) is doing the right thing when no one is looking or will even know...I sleep well at night because of it, and if you really soul search, you'll realize that if you actually believed it was ok...you wouldn't have asked for an opinion...if it doesn't 'feel' right then it isn't...

Woodbridge Environmental Tiptophouse.com · Answer

So now I know how you collect your money KMS.  Personally I prefer my 44.  lol

Daina S · Answer

Thanks for the answers, but I'm still hoping for more ideas.

Sherrie S · Answer

Daina S, I buy from experienced contractors I trust and I don't care if they get money on the side (kickback) as long as the price I am quoted is OK.  This thought is based on knowing the contractor before you buy.

F1111p · Answer

Kickbacks are a scummy way of doing business.  It starts small with the little guys and gets even more disgusting the bigger the pot gets.  Shame on all of you!  Why not join the ranks of our politicians?

Dave · Answer

I'd venture to say that if it is not disclosed in your contract, it is fraud.

Lyn Therese · Answer

It's just an understanding in the business. No one really makes a lot of money this way. But you have to make money in your business to survive. There are people who will not agree but than most likely they are probably expecting you to work for free or close to it. I am a hair stylist and what the salons charge is at least 20 times more than the price of the product. A salon will not tell you this but it is just understood in this profession. Labeling it a kickback is a scummy way of putting it. It's business.

Question for Interior Designers - do you get kickback from suppliers?

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Question for Interior Designers - do you get kickback from suppliers?

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