SBID’s policy on fair trading in interior design
Vanessa Brady comments on SBID’s latest campaign, the Fair Trading Policy in Interior Design. © Copyright SBID wp-content/2012
Trade discount is for trade, not retail, and mixing the two is unfair to all parties. The SBID Fair Trading Policy does not recommend, support or promote passing on trade discounts to the public.
Historically some interior decorators and designers passed on their trade price to potential clients to obtain work. That is desperation, not a design commission. Such designers and decorators cause mass damage to the overall industry: they undermine the retailers’ position and they betray the supplier’s price structuring integrity. In doing so, they create grey billing procedures where the customer is unable to breakdown an invoice costs and assumes inflated pricing, leading to disputes. In addition, a lack of transparency on fees, discounts and project fee structuring has often prevented potential clients from seeking professional design advice at all.
The common practice of designers passing trade discounts to their customers, i.e. the public, shrinks the development of interior design as a profession and ultimately costs each market sector profit and reputation. It is not surprising that those who trade in this practice are the largest sector in administration and bankruptcy. They are also the most boisterous when policies such as the SBID Fair Trading Policy are introduced. SBID’s aim in implementing the Fair Trading Policy is specifically to further separate hobbyists from professionals and, in doing so, raise the standards of the entire profession.
Practitioners who provide a design service free of charge undermine the overall design industry. It is neither appropriate nor financially sustainable for professionals to provide their key performance, their design knowledge and advice, free of charge. It is by charging a fee for the trained services of a professional designer, that a designer generates income.
Retail prices include the cost of stock and customer service. Trade prices are products supplied on business to business (B2B) terms by manufacturers, or professional industry partners (PIPs). Interior design has until now rarely respected the difference. Currently, two common unprofessional billing methods adopted by designers are:
1. Sharing trade prices as leverage to obtain projects;
2. Providing a free design service, creating income from ‘supplying goods’ only.
All too often a designer’s unrealistic recognition of project costs and random product supply between trade and retail-pricing generates customer complaints. This common practice is therefore a threat to the overall reputation and growth of the profession of design.
Other grey areas of passing on trade prices to one-time-purchasers make it impossible for retailers to compete fairly. Supplying goods has additional costs attached for different performances: retailers absorb costs such as showroom space, staffing, after-sales service and product training etc. which designers do not provide.
There is a clear additional cost in every sale a retailer makes when compared to the service provided by a designer. Designers may need to install, take delivery, organise returns of products, and so on, and this clearly has time (and cost) attached. Therefore the fee a designer earns in a trade price reflects some of the services the designer performs.
Under the SBID Fair Trading Policy, a clear charging system sets out procedures for other services such as sourcing and supplying products. SBID design professionals are encouraged to be transparent about rates for hourly, daily and project billing fees in their terms of engagement.
The policy supports SBID Designers and PIPs* and provides a fair, equitable industry plan for growth. Registered SBID international industry body members are supported by the policy to promote qualified services, however the policy does not advise, direct or propose what a fee rate should be.
*PIPs – Professional Industry Partner
– SBID was formed in March 2009 meeting the European Councils entry criteria for Interior Designers and Architects and was inducted into the European Council of Interior Architects (ECIA) in September 2009.
– Until 2009, Britain remained unqualified to meet the eighteen year old EU standards in interior design
– The sixteen page Intellectual Property owned document* formed the basis of the registration of SBID under British Law and part of the terms of membership of the European Council of Interior Architects (ECIA)
– Andrew Rolfe is one of Britain’s leading (top 100) contract lawyers, a member of the SBID Advisory Board and partner of Clifford Chance law firm.
*The sixteen page business prospectus is the intellectual property and copyright of Vanessa Brady and Andrew Rolfe; its joint creators. It may not be reproduced without written authority from its joint creators.
– The SBID Fair Trading Policy is part of a joined up business plan that creates the bases of a design professional through education, practice and control with the aim of protecting the consumer and improving the professional image and performance of design professionals.- SBID is a Professional body raising, promoting and setting standards to create opportunities for design professionals to trade pan-industry providing design advice products and support services. The SBID Fair Trading Policy supports and builds on the relationship between these market sectors to create a clear route to market for the professional sector of design. The outcome will be a joined-up industry.