Whether to Charge a Design Fee
Charging for design work makes sense from the cabinetmaker's point of view, but it can be a deal-breaker for clients. August 7, 2008
I went many years without charging a design fee, and as soon as I started to charge, I lost out on a lot of opportunities. I was only charging $300-$500.00, refundable if they choose me, but most people got scared off. Anyone implementing this, and if so, how did you get it to work for you? Is it easier just to include your fee in your proposal and hide the costs?
(Business and Management Forum)
From contributor J:
I haven't done this, but I'd think the only way you could charge such a fee would be if the customer felt confident they'd get their money's worth if they decided not to choose you. Did you present prospective customers with a spectacular, professionally-photographed portfolio? Do you have a design degree or certification you can point to? Do you have an exceptionally great reputation?
I wonder what the exact problem was that you were trying to address. If you used to spend time doing designs that you never got to implement and get paid for, isn't a design fee that turns away some of those not-serious customers doing exactly what it's supposed to do?
From contributor S:
The problem is that a customer could end up going to 6 different people before they find a design they like. If they all charge a design fee, then they might spend $1800.00 to $2500.00 before they even get started. Therefore most people balk at paying a fee up front. The truth is that they should be paying a fee to a professional that they hire to do a job, which in this case is to design something. Building the job is the next step, which they are usually willing to pay for. We have design students come from the local university design program to do practicums with us. After graduation there are very few who actually get to work in their profession. Companies don't want to pay someone to sit and design either. Not sure what the answer is. I guess we are expected to work for free unless you hide it in the cost of the project, but you are still not getting paid for the ones you don't get.
From the original questioner:
This topic always kills me because it makes me think of a plumber or an HVAC person who can charge in excess of $100 just to show up at your front door, and people expect to pay this. I've always wondered what makes them more of a professional than us that they can have a trip charge, but people balk at us when all we are trying to do is get a few bucks for the work we are actually performing, not just driving to their home.
From contributor M:
Unfortunately we are in a business that is not a necessity, as running water and heat are. We must put on a show to dazzle, unlike the other trades.
From contributor S:
When it comes to cabinetmakers or carpenters, when a customer calls you in to build a bookshelf, they look at it as if they are hiring one man. They don't look at it as hiring a company, so they ignore the fact that you have overhead to pay for. All the things that take up your day have to be paid for, like picking up materials, answering the phone, etc. They might work an 8 hour day and get paid for that, but they can't see that you as a carpenter deserve to get paid for every hour also. As far as they are concerned you should only charge for the hours you are working on their bookshelf. On top of that they think that $25.00 is enough for any person to make per hour. Then you have the customers who figure they could build it themselves, but they hire you only because they are too busy. You have people who always say they admire people who can work with their hands, but they can admire you a lot more if you charge less. They look at your work and praise you up and down for being so creative, but their attitude changes with every zero you add to the bill.
From contributor K:
The way I see it, most folks would pay good money for a hot lead. If it just takes a few hours on the piece to turn it into a sale, then that is cheaper than putting an ad in the paper and starting all over. I usually pre-qualify the customer before spending the time on the design, though. Ask questions like, who else have you talked with and what didn't you like about their company? Is your main concern price, or looks and function? They will pretty much tell you what you need to know without really giving you the number.
From contributor D:
We go back and forth with this all the time. I have a design degree, so I have the credentials, but I'm not sure how much that matters most of the time. I play it by ear sometimes... If a customer has a clear idea of what they want, pictures from magazines, etc, I tend to not charge one. But if it appears that I'll be doing all the idea part of it, I'll pass that by them and see what their reaction is. I've had someone take my designs and have someone else build them (and build poorly). Another big part is whether or not they're just fishing or seriously interested in you. Most of our work is by referral, but I have gotten a job (with a design fee up front) from someone who found us through an online search.
From contributor S:
I once had a customer who sat with me and told me what he would like me to design. I thought for a few minutes and then suggested an idea and he said, "that would be perfect." When I told him that I would put it together into a proposal and that there would be a small fee, he said, "I'm not paying for an idea that you just got out of your head." I asked where he thought I should be looking for ideas if not my head. He wanted me to have to do more research before suggesting ideas. I went home, did a variation on the same theme without any more thought whatsoever, and charged him and he was fine with that. It defies logic sometimes the way some people think.
From contributor B:
I charge a design fee of $350 for a house. I don't do any design work without that deposit. I might do a quick 3D rendering of the room, but they'll never see dimensioned drawings without the design fee. That $350 is listed as a payment on the final invoice. So, if I do the work, the design is free. If they decide they want to shop for a better price on a house full of cabinets, they can take my drawings and shop all they want. They paid for them, so they are no longer my drawings.
From contributor R:
I agree with contributor K. I try to pre-qualify the customers as much as I can so that I can spend as much time as needed with customers who are doing projects and as little time as required with tire kickers.
From contributor E:
I don't charge a design fee - but other than some sketches on my notepad when I first meet with them, I don't do any design work until after I have given them an estimate and they decide to proceed. I base my estimate on a linear footage and crystal ball system and explain that I cannot give a firm bid until we have finalized drawings and that I won't do drawings until I think that they are serious about the project. Generally, if they like my estimate and get back to me, I get the job. If not, then I haven't spent too much time on it. It seems to work.
From contributor N:
Funny how serious people are all the way up to the point when they hire you. You have been to their home, measured, talked design, then gone back to the shop to draw up a design on your computer (using low cost software like Cabnetware, KCDw, or Cabinet Vision). Then they visit the shop to see your drawing, a start date is set, and they grab your drawings and pack them away before you can politely tell them that you have 12 hours into this design process, and those drawings arenít free. But at this point do you risk alienating the customer that has convinced you that you are now the new family friend, and that they will use the drawings to talk things over at home once more, maybe make a few changes? Then you never see them again. After all the bull, they're off to your friendly competitor and since the design is what they want, now they're looking for a better deal.
It's a game. It would be nice to charge for the drawings, and some do, and most won't hand them out. There's no easy answer. One thing I'm considering is drawing up the kitchen, and moving a window over let's say 2", a door maybe an inch or so, offset the kitchen sink 1 1/2", shorten a wall to wall cabinet 1"... Then they take your drawings to another shop and ask for a bid, and tell them "Hey, he's been out and measured, you can build off of those." Most shops will measure, but I've been on three jobs now where I had to drive 100 miles or more to measure, so the next guy may just build what the customer wants. It's like when you buy study plans for a new home, which are not the buildable plans. The study plans that are cheaper have framing mistakes and foundation mistakes built in. I know a builder who used to build homes here in town using study plans. The framers had problems.
From contributor H:
We don't, and never will, charge a design fee. I will do drawings and renderings, and show the client. But no measurements or specs are on the sheet they see, and I keep them. I have on a few occasions sold the drawing and specs to clients so they can shop around. Need I say, they never come back! I say the job is 10k, the client takes the drawings and specs to the next guy and says, "I can get this built for 9K - can you beat it? Here's the specs." Now he's got it for 8k. It sucks, but it happens.
From contributor V:
We will do a quote from plans, spend 20-30 minutes getting the specs. No drawings until either:
a- 1000 usd design deposit, refunded from final price if they go with us
b- you are with a regular builder
c- friend of the owner
Then they get drawings, but nothing with dimensions until contract (unless they ask).
From contributor H:
We don't do drawings until after we have a deposit. If someone wants to buy the drawing, we charge $50 an hour to draw. We give a bid based off the plans they provide. If they want us to go to their house and bid, we will but we will not give drawings out until we have a deposit. If it is a small job like, say, a downstairs kitchenette, then I will have them make a sketch and send it to me. I will give them a price, but no drawings until I have a deposit.
From contributor Z:
I purchased a nice laptop computer with expensive graphics and video card and better screen just for presentations. I never pull out a printed drawing or elevation drawing. I can do on-site slide shows of their new kitchen design and make modifications right there in front of them. I often get asked, "Oh, did you bring me copies"? I just tell them, "No, I do all my drawings on the computer, but will be glad to share them for a small refundable deposit." I will offer to email them a PDF copy that has security on it so it can not be printed or emailed again.
This has not been an issue with my customers. If asked why we charge, I just explain that it covers our time invested, but is fully refundable upon making the deposit. Most of my customers are word of mouth customers anyway and have seen my work and plan on using me anyway. So not such a big deal.
I did lose a job because I gave out my drawings, thinking I would get the job during Christmas. It was a brother of a friend. I gave him the drawings and later found out that the family member of another friend loved our design and could build it a couple hundred dollars cheaper. I hate friends/family and business - it often doesn't work out. I am still waiting to get paid for the last family job two years ago.
From contributor I:
Unfortunately, it's part of our lowest-price culture to get three estimates. The things that concern us the most aren't necessarily the same things that concern the customer. To some people, remodeling a kitchen is no different than replacing a tire on a car. So if a customer is charged a $25 good faith refundable design fee to cover the cost of the ink, they will run to see if your fee is $25 more than the next guy's. It happens to architects and designers as well.
I was forced to do it when purchasing for a large shop. There was no relationship building. It was expected that the vendor build the relationships, yet even when the rep took us out to lunch, our project manager still had us call all the suppliers and get bids from whoever carried a particular material. Then we would systematically beat them down in price. Then beat them down again, with great theatrics, to get them in line. Then pit the two lowest bidders against each other with even more theatrics, and go with the one who can deliver this afternoon.
Learn who your customer really is. In more cases than we care to admit, because we take great pride in our work, he is the Shreck in the back of the all-you-can-eat buffet. And he's not there for the cuisine. I can see my own head in that mirror sometimes.
So, try this next time a tire kicker wants references. Tell them you'll only give them the good ones. It doesn't matter to him. He'll never call. He's only bluffing.
The bottom line to win in his game is your sales ability in answering these four questions:
What is it?
Can you build it?
How much does it cost?
Can you install it today?
From contributor N:
I do pencil layout for cabs and then give a bid. I will bid off of their drawings or prints and all for no charge. But they get nothing from me but a price. That is a single price, so that they can not nitpick. If they want drawings, it is 300.00 and is nonrefundable. Otherwise they can see shop drawings after a deposit is made. This has not cost me a job yet.
From contributor A:
When I provide an estimate for a job, I also show the potential customer a concept drawing of what I think they want. This drawing is pretty basic, with only major dimensions on it. It also helps me with my material estimate. The written estimate shows costs for shop drawings, which include the time it took for the concept drawing (not shown as a separate line item). The customer doesn't get to keep the concept drawing unless they pay for it. If they pay for it and I get the job, it is credited to the overall price. Once I get a down payment for the job, they can have all the drawings they want.
From contributor X:
Unfortunately, when selling a custom product, one has to spend considerable time holding the customer's hand and finding out just what they want built. It's part of the process. That's why all you "high end" builders are getting $650 a foot (well, according to the posts) for a product that functionally is no better than a $100 a foot product from a big box store.
You won't sell every kitchen you draw, but that cost should be included in your building costs just as advertising and kickbacks - excuse me, commissions - are. You can go to any of the stock cabinet outlets and sit down with a designer and walk out an hour later with a line drawing plan, less dimensions, but with the stock numbers and a free catalog the dimensions can be recreated in 10 minutes.
Customers wasting one vendor's time and making the purchase somewhere else happens in every business... and all of us do it to someone some time. It's a normal part of business, so quit whining about it.
From contributor V:
We had a gentleman come in last year - one of our previous clients from ten years ago. No design fee. Four meetings with them, three different concepts (wife would change her mind based on whatever magazine she read that day). After she settled on the one she wanted, he wanted us to layout his kitchen for his electrician, framer and plumber. While I was there, I assisted their AV man on speaker placement based on entertainment center (which was never mentioned prior to this). Spent three hours on site.
He stopped by to look at entertainment drawings, said he needed drawings to "check our prices with Lowes," and we might get the EC, but we were way 5K higher than Lowes on the kitchen, and he didn't see why we would be that much more - on a 30K kitchen. I told him nicely the drawings were our property, and if he wanted these, he would have to pay a design fee (refunded on contract). He walked out in a huff. Came in a few weeks ago, wanting us to make some cabinets to match what they had bought. Seems the factory cabinets had too many fillers on the angled island. Imagine that...
All told we had close to 20 hours in his job, between meetings, layout and site visit.
From contributor G:
I read all these post with a smile. It makes me feel a little better knowing that I am not alone in this mess. We have been back and forth about charging a design fee also. We used to do drawings for free hoping our professionalism and attention to detail would help win the job. Hours spent talking with the client and asking questions. Hours spent showing them samples and options. Hours spent drawing and re-drawing. Then you never hear from them again. Unless you land the job, all this time goes un-billed. You canít run a business like this.
We tried charging a fee, but most potential customers got turned off by this. It seems that you can head over to the local big box and get design help, look over catalogs and samples and even get a layout all for free so no one wants to pay you for the same work. Worse is they want you to match the big box price but with higher quality and more custom work. Thatís happeningÖ
This is our new strategy (no guarantees). We ask the client to submit a drawing or a photo of the work they want a quote on along with general dimensions. If they have this, we will give them an estimated price. If they are interested in moving forward after receiving the estimate, we take a non-refundable deposit or retainer before we will do any further work. This covers our costs on creating drawings, meeting with the client, making samples and working out all the details. Once this is done we create a final project quote. If the client goes with us, the money is credited. If not, hey, itís non-refundable. If they donít want to pay this fee, then 9 out of 10 times they are just out tire kicking anyway and you want to get rid of them as fast as you can.
If they donít have any drawing or photo, then we refer them to an interior designer. We work with several. Itís now all off our plate and we donít have to spend any of our time without getting paid. Besides, it seems that a client will accept paying a designer a fee as opposed to paying a cabinet company a fee for the same work. Go figure.
The other upside here is you are now sending work to the designer who in turn can send you work. Creates a good business relationship with a partner that can send you lots of work from clients you may have never come across. And when work comes from a designer, they have their own drawings.
From contributor C:
It would be nice if, when you have a designer involved, they provide a design/drawings. We are currently working with one who has only given us some sketches. She has not measured the site, nor does she have a clue if everything she wants will fit. Truly amazing.
We currently do not charge a design fee. These costs are included in the overall price of the project. Typically, the most that a potential customer will get is a sketch on a piece of printer paper. Sometimes we will give drawings prior to getting the job, but it depends on the customer. We have a home builder that we work for that, if asked, we will give drawings to. If his end customer decides to go elsewhere for cabinets, he takes care of us. This is not typical, though.
The comments below were added after this Forum discussion was archived as a Knowledge Base article (add your comment).
Comment from contributor O:
I felt compelled to add to this because it's a topic of discussion with one man shops too. Most of the replies here seem to be from larger shops. I'm a one man show and after many years of doing design drawings, material take offs, etc. and then not getting the work I now charge a $75.00 non-refundable design fee. No one has complained about it, I tell them that I need to price the materials, locate the hardware, estimate the time, and all of those things take time. I give them a copy of my drawing which is fairly simple and has no dimensions on it. The construction details are listed in my bid. I'd say that 80% of my bids are accepted this way. When I give them the total cost of the project I subtract the $75.00 design fee to get their bottom line. Like many of you, I got tired of doing all the work required to bid on a job so now going in, I know I'll make at least the $75.00 on it.
Comment from contributor A:
Contributor Z has it the way I do it. I do all my design work on my PC using eCabinet Software (free) and carry my laptop with me to show the customer the renderings. I never give them a copy, but stress I will be willing to come back to show them my designs if they would like to see them again. No one gets my designs unless paid for.
I have lost very few jobs doing it this way. I factor the design time into the final quotation price and never separate it out. People don't like to pay for what they might not like, architects excepted.
Comment from contributor T:
For several years I have been giving potential clients a one page "billing agreement" form. This form outlines how and what I bill them for. I break down my services into two categories. First, I let them know that if they give me a drawing or design with sufficient info on it, then I will give them a free estimate. If more design work needs to be done in order to work up a cost then I will charge my hourly rate for the design services. I then list what kinds of things I charge for (product research,samples, site consulting, drawing and etc. I also inform them that I will be billing them for the above services even if they do not have me do the actual fabrication.
The second part of this billing agreement outlines how and what I bill for fabrication and installation of the project (time and materials vs. fixed price vs. shop time and installation each job may have different conditions). By separating design services from fabrication I make it clear that design work is real work and worthy of being compensated for. I donít like to give this form to people at our first meeting but feel it necessary to be clear about what I expect from clients before I waste time and money on unproductive leads. Iíve only had one person refuse to sign my agreement form in over eight years.
I also include on this form that the client must inform me of any extenuating conditions such as allergies to any chemicals or materials and any other special needs that affect the way I build the project. If people donít understand and value your design services then they probably won't be worthwhile customers.