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Opinion on dealing with "designers"

Discussion in 'Picture Framing Business Issues' started by FM Framer, Nov 29, 2016.

  1. FM Framer

    FM Framer CGF II, Certified Grumble Framer Level 2

    I work with several "designer" - interior, architectural, office, residential etc. Most of them are in the trade, others not so much.....

    My question is - do you as a framer pay a fee to a designer that brings their customer into your store for items to be framed?
     
  2. CB Art & Framing

    CB Art & Framing SGF, Supreme Grumble Framer

    I would. Some designers make money by charging their clients an hourly fee, while others charged are markup.
    You can pretty much tell which are legit. Blue prints in hand, color swatches etc. But simply a business card doesn't cut it!
    You could start with a 10% discount at first and then adjust as the relationship grows.
    I would avoid paying a commission and do discount instead.
    Also ask to see their resale (state tax) permit.
    Prearrange what pricing you will quote if customer is present. If their customer pays you direct, apply discount as future credit.
    Also make sure to clarify your arrangement if their customer decides to bring in future work without the designer.
     
    shayla likes this.
  3. wpfay

    wpfay Angry Badger

    If a designer comes in with their client, I am billing through the designer anyway, and there is usually a discount involved. So to answer your question, yes.
    Terms are the same as for any new customer 50% in advance and 50% upon completion. If there is any complaints about that then they can pay in full up front. I will usually change the terms to net 20 or 30 after a year, depending on how well the year has gone.
    Paying the designer directly makes them a free-lance 1099 employee, and shifts the liability for payment to the customer. I would be less generous in the compensation to the designer in this instance, since it is making you do more book work and have to generate documents at the end of the year.
     
  4. Creative Chicks

    Creative Chicks SGF, Supreme Grumble Framer

    Absolutely not and for basically the reasons that Wally stated.
    Designers and the trade get a standard 15% discount and if they do a boatload of business with me I sometime boost that to 20%. That will be the only way they make money off me, if that is what you are referring to.
    I have some wonderful designers that bring their clients in with them and I give them the discount. I do not forward that discount if their clients come in on their own without the designer. Why a designer would even think to discuss what kind of a professional discount I give to them is beyond me, but it has happened, which puts me in an uncomfortable position to have to explain to their customer why I don't extend that to anyone who walks through the door!
    I think I may got off another tangent, but hope this helps.

    Lori
     
  5. FM Framer

    FM Framer CGF II, Certified Grumble Framer Level 2

    CB, Lori, Wally - I should have been more clear......

    I do give a 15% discount to those in the trade.
    This "designer" caught me off guard after the fact (weeks after) with a "when will I receive my 10%?" after the job was done.
     
  6. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    I would think that any discounts would be contingent on a certain minimum level of ongoing business. I recommend that anyone considering discounting take Jay Goltz's class at WCAF called "The Goltz Standard". It will open your eyes as to what you give away when you discount custom work.
    :cool: Rick
     
    shayla and prospero like this.
  7. Robbie55

    Robbie55 Grumbler in Training

    I always give a discount to my interior designer clients but if they come in with their client I just keep my mouth shut and provide retail prices only - the designer can then say "does that include my discount" if they want to pass on the savings to their client or keep quiet also if they want to pocket the difference.
     
  8. graysalchemy

    graysalchemy CGF II, Certified Grumble Framer Level 2

    I deal directly with all my design clients I never meet or contact the end user at all, so I invoice the designer directly. Its then up to them to add on a markup. As I deal mainly with commercial clients then my prices reflect this anyway so I don't in general discount much further except my main clients.
     
    prospero likes this.
  9. Dave

    Dave SPFG, Supreme Picture Framing God

    Generally we pay a 5% referral fee to designers for art & framing purchases made by clients that they bring to us. Sometimes we do not even meet the client themselves though payment comes directly from the client and is not discounted.
     
    shayla likes this.
  10. Artistic Framer

    Artistic Framer CGF II, Certified Grumble Framer Level 2

    I do a 10% designer discount. If they bring the client in, I charge retail, and credit the designer the 10%

    Dave...just out of curiosity, how do you keep track of that 5%? is it a POS thing...spreadsheet? I've thought of doing this as well as a "rewards" program, but found it to be logistically difficult. I have Specialty Soft which I kind of still like...but their internal rewards program is broken, and they just can't seem to fix it.
     
  11. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    Designers can be a big source of business, but they also introduce your business to some potentially big customers.
     
  12. Dave

    Dave SPFG, Supreme Picture Framing God

    I actually track it myself instead of depending on our bookkeeper to track it. When I receive a payment from a designer's client I email our bookkeeper and have her send a check out. Usually I'll do this once a month. Easy to review and track in FrameReady.

    I look at it as a sales function because the designer sees a check come from us and is encouraged to bring in more clients. Three designers received several thousand dollars each from us last year. I love working with them because they are constantly bringing in new business for both art and framing.
     
  13. Artistic Framer

    Artistic Framer CGF II, Certified Grumble Framer Level 2

    Thanks Dave. I'll have to check FrameReady out again...may be ready to make the switch.
     
  14. wpfay

    wpfay Angry Badger

    Yeah, I get that occasionally and nip it in the bud very quickly. Any and all arrangements with any other allied professional has to be made in advance of the sale.
    One sure way to qualify a potential B to B relationship is to get them to fill out an application including banking, credit references and EIN, Business License, and sales and use tax certificate information. I also had an attorney draw up a form for business owners to sign agreeing to be personally responsible for any debt so they can't use business failure as an excuse to not pay.
     
    FM Framer and Rick Granick like this.
  15. Frances M.

    Frances M. CGF II, Certified Grumble Framer Level 2

    I took Steve McKenzie's class at WCAF last year - can't remember the title, but I thought it would be interesting given his past history with Larson Juhl. On dealing with decorators, (now that he owns a retail decorating business), he stated that the decorator discounts from framers should START at 20-25%, otherwise the decorators wouldn't make any money. My eyes bugged out a little bit at that.
     
  16. bruce papier

    bruce papier CGF II, Certified Grumble Framer Level 2

    We don't pay a direct commission to the designer- too much paperwork and 1099's. We give them a discount and they charge their customers whatever they want. If they bring the customer in, we quote retail. The billing goes through the designer unless they tell us differently.
     
  17. JFeig

    JFeig SGF, Supreme Grumble Framer

    My viewpoint on decorator discounts comes after some basic concepts are reviewed.
    1. A frame shops "list prices" in most cases are based on making a fair return on their labor and investment.
    2. A big box "list prices" in most cases are bloated prices "compare to", "suggested list price", or some other theoretical price that the retailer can use to give a customer a larger "sale price" story to make them think that they are saving more money.
    3. 'I have a cousin in the business and he can give you a DEAL'.
    4. Many of the sources that decorators use have "list prices" that offer a cushion that accommodates a generous margin for a decorator plus a fair profit for the seller or workroom. Some of these workrooms never deal with an end users pricing. If they do, I do not think that they have the same pressure for "retail price" competition.

    During my career I have had decorators that were worth a discount and those that were not. I feel that many picture framers pricing structures place them between a rock and a hard place. If you want to deal with "the trade" your pricing structure has to accommodate for a fair profit for the shop and still give a discount.
    My philosophy is that if I do the design work, I should be paid for my time. If the decorator does their job: boom - boom - boom the order is written, they are worth the discount. Taking an hour to write up a $400 order makes me upset!
     
    Last edited: Dec 3, 2016
    FM Framer and Dave like this.
  18. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    Excellent observations, Jerry. This is what I was getting at when I suggested taking Jay Goltz's course. Retail framers who think they can just discount from their regular prices and make a fair profit are likely kidding themselves... or wondering why they aren't making money.
    :cool: Rick
     
  19. CB Art & Framing

    CB Art & Framing SGF, Supreme Grumble Framer

    A good decorator, once familiar with your shop, should be able to do the design themselves thus not taking much of your time.
     
    Dave and David Waldmann like this.
  20. neilframer

    neilframer PFG, Picture Framing God

    We work with a few different design companies.
    Some of them just come in and look thru our corner samples and they take the samples with them to show their clients.
    One large design company that we frame for has their own design studio with their own sample walls.
    I worked with the woman who owns this company for years at a previous job about 15 years ago.
    They don't buy any moulding, they just have the samples.

    Their clients are very high end. Sports personalities, tv personalities, etc.
    They design at their studio and then they just email the work order to us.
    The only thing that they request is that we don't put our label on the back of the frames because they don't want their clients to come directly to us and bypass the design company and that's OK.

    We don't have to spend any time with these designers or their clients except for punching up the invoice.
    We discount to them and they charge a retail price to their clients.
    We also sometimes do the installations for them at the client's home or business and we charge our regular price to the client for installing.
     
  21. graysalchemy

    graysalchemy CGF II, Certified Grumble Framer Level 2

    The majority of my clients leave it up to me to make suggestions citing that they don't have time for choosing mouldings. but if I make it easy for them then they are more likely you give md the work
     
  22. Joe B

    Joe B SGF, Supreme Grumble Framer

    I have roughly 22 designers that I work with on a regular basis. These designers can come in anytime because we have a understanding, they design and I frame, we both are good at what we do. I do not tell them how to design, they do not tell me how to frame. On the other hand, I have about 50 designers (just a guess, but I'm sure I'm close) that are not welcome in my shop. They have been here once and I do not care if I ever see them again. They were very rude, condescending, and thought they knew my job better than me. Please do not tell me I'm treating them wrong or that I should be bowing down to them or any other stuff I'm doing wrong. I have enough business without the designers but wouldn't mind having more designer business if they came in and treated me the way they themselves, want to be treated. just my opinion. Joe B
     
    Rick Granick likes this.
  23. Rob Markoff

    Rob Markoff PFG, Picture Framing God

    Calling a designer a decorator won't win you any favors........ :)

    I am amazed at those "rolling over" to give someone in a "class" called the "design profession" an immediate discount simply because they say they're a member of the "class." Somehow in our industry it was "tradition" to immediately give a 20% discount...yet most framers still can't read a balance sheet. Many framers fear losing a designer's business because if they don't offer the discount, some other framer will.

    Where does the "discount" come from? How is it any different than a coupon? ZERO is a larger number than a negative number.

    For those who say "they give me a lot of business" I ask if you are using a POS and looking at the back end to determine just "how much" business? Reminds me of a framer who says, "I lose a nickel a unit but I make it up in volume." How can you possibly offer 20% off your prices and still make the same amount of profit?

    Or the one in my Proven Pathways to Profits class who says that he "fools" the designers by marking up his prices by 20% and then giving them a 20% discount so he doesn't lose money........WRONG - as Jay Goltz says, do the math. (on a $100 sale, the net result would be $96)

    I'm not saying DON'T give a discount, but basic fundamentals state that unless your pricing is factored in anticipation of giving a discount of ANY kind, (coupons included), you cannot possibly use your everyday "regular" retail pricing, give a discount and expect to remain profitable.

    Your pricing needs to be based on two things, time and materials. (overhead is a factor of time) Unless the designer's business can substantially offer a reduction of either of those two things, your net costs have not changed. By giving a "discount" you have lost margin.

    For those who say the designers do most of the design work - are you saying that the design of a job takes (or is worth) 20% of the selling price?

    By saying they have "brought in a lot of new business" is MEANINGLESS if the business they have brought to you is not profitable - independently, by itself.

    Please don't tell me that the "increase" in business has leveraged you into a higher buying category so that alone is enough reason to do unprofitable work.

    For those who give an "immediate" discount to anyone who says they are a designer - I ask you-

    AFTER paying yourself a living wage, do you have 8-11% retained earnings at the end of the year?
    Do you have a retirement fund and look forward to being able to retire (and not because you or a spouse has a pension)?
    Do you offer health insurance to your employees?
    Do you take an annual vacation?
    Do you regularly attend trade shows?
    Are you working 40 or less hours per week?

    Every time you "give away" money, you are depleting the funds for any of the categories above.
     
    Rick Granick, cvm and Joe B like this.
  24. graysalchemy

    graysalchemy CGF II, Certified Grumble Framer Level 2

    My most profitable mode of working are large contract jobs were I make a vastly reduced margin. how can this be so? Well I am more productive as frames and mounts are all standardised and the level of finish is reduced (with the clients understanding) So if I was to do bespoke work I might make a gross profit of X in a week but if it's a large contract job in the same time I could make double that my % gross profit would be reduced which admittedly doesn't look as good on the balance sheet but it's the profit that matters.

    To make money out of designers you need be doing volume, usually commercial clients you wouldn't normally have access to. But if the designer is just bringing you what the home owner could have brought in themselves then you need to think why am I discounting to this designer? Surely the designer should be charging the client for the service and not you.

    But to successfully do volume contract work like that you need the space and facilities but most importantly you need to get rid of you bespoke framing mindset and developed a contract framers perspective.

    That's just my view on Robs excellent post.
     
  25. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    Very good posts, Rob and Graysalchemy. It has always been a source of befuddled amazement to me how retail custom framers think they are obligated to give a profit-destroying discount to someone who (based on volume) is really a regular retail customer who just happens to call themselves a designer. Yes, they might use more fabric mats or pick glitzier mouldings than many of your regular customers. But, their projects are still one-off, truly custom jobs, not volume framing where economies of scale come into play. You need to make what you need to make for YOUR work. If they want to charge their own customers $500 an hour for their time and expertise on top of what the framing costs them, fantastic. But it shouldn't come out of your pocket and (as Rob points out) quality of life.
    :cool: Rick

    BTW, couponing is the same issue. When a new customer asks if we have any coupons in effect I simply answer, "No, we don't fool with those. We just like to have fair prices for everyone. We would just have to raise prices, which we hate to do, to make up for the coupons." I have never had anyone refuse to place the order after hearing that.
     
    Smile with Style and Rob Markoff like this.
  26. David Waldmann

    David Waldmann SGF, Supreme Grumble Framer

    Actually, it looks great on the Balance Sheet (assuming you got paid, and didn't over-buy materials to get a good price and have most of it still sitting around). Where it may not look as good is on the Income Statement if you're looking at percentages.
     
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  27. graysalchemy

    graysalchemy CGF II, Certified Grumble Framer Level 2

    Thanks for the clarification David, my accountant always likes to see my % GP holding up and staying constant, that is probably what he is taking about.
     
    David Waldmann likes this.
  28. Dave

    Dave SPFG, Supreme Picture Framing God

    I have several clients that drop things off and their designers come in and pick out frames... quite quickly. We've designed as many as 10 pieces in 15-20 minutes, often with closed corner frames, fabric wrapping, MG etc and price is never an issue. One designer picks out art for his clients, we take it out and hang it and the client sends a check. His last project was eight original paintings totaling over 40K. These types of designers facilitate the sale... indeed "make it happen"... and deserve the 5% referral fee we pay.
     
    David Waldmann likes this.
  29. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    I agree, Dave. However, I don't think that is the situation with a lot of the designers that regular retail shops deal with. When you have sales in that range, it gives you more flexibility in pricing to retain your profit. Plus, you are selling art that (although it does cost overhead to provide the gallery space) does not require a lot of expensive labor to "convert" for sale.
    :cool: Rick
     
  30. bruce papier

    bruce papier CGF II, Certified Grumble Framer Level 2

    Here's how nutso the whole designer thing is, at least in our area. My neighbor years ago was the vice president of an office design firm. We invited him to let us give him a quote on a framing job because we knew his company was using the highest priced framer in town. After we gave him the quote, he explained he couldn't use us. Our price to him was lower, but the other shop's retail price was higher (keep in mind, their price to him was higher also), and they always gave their customers framing at the retail price of the shop they used. We tried to convince him he could charge his customers the same prices he always charged them in the past and make more money. He said that would be dishonest.

    He' s not the only designer that has told us that.
     
  31. Kirstie

    Kirstie PFG, Picture Framing God

    We deal more with the interiors departments at architectural firms specializing in commercial work than we do with individual deisgners or interior decorators specializing the residential work. The former never sees the form below; the latter does. Spellng out terms helps clarify designer discounts. Any discount in our shop excludes package specials, ready-made frames, and other discounted work. Commercial work for architects is priced from the bottom up as it is almost always in quantity. They never see a percentage discount.

    We do find that individual designers prefer to bring or send thier clients in to us. When the designer is buying the work for the client, the designer will pay a reduced price, but the client usually sees the full retail. When the client is paying, we charge retail.

    We have a lot of corporate clients that began as clients of architects working on large scale building or remodeling projects. The clients then come directly to us for additional work. I have not met one architect who is interested in running the billing through the firm on an ongoing basis. They are on to the next large project and are happy to have us service the client going forward. This is nice ongoing work at full retail. The cost of doing that business is often greater than normal retail, however, because it can involve more service.

    This is the PDF guideline form for our residential designer and decorator clients. Most of them never qualify, and we know we may loose some to framers who are willing to discount on the hope of future work. My experience is that the promised work rarely happens.

    http://www.framersworkshop.com/ToTheTrade/TradeGuidelines.pdf

    Finally, there are clients who really do order in enough bulk to justify a discounted price. For us, this is work done for gallery shows and for resale to regular accounts. Bulk in this case is roughtly 100 of the same thing, or 50 pieces for a show all done with the same materials. Some of these are easy, and relaly do justify lower prices, but I have learned that even these jobs, which can seem simple at first, can be fraught with time-sucking difficulties, so we are now very careful to price in anticipation of inevitable problems, changes, delays, and indecision.
     
  32. cjmst3k

    cjmst3k SGF, Supreme Grumble Framer

    This is where I'd likely say "What discount?" and then never give them a discount again.

    If a designer discloses to a customer about a discount they're getting, it gives reluctance to the customer to ever do business with you. And maybe they tell their friends "Oh, use my designer Joey for a discount" further eating into profits and creating lowering customer confidence in your pricing. My two pennies.
     
  33. graysalchemy

    graysalchemy CGF II, Certified Grumble Framer Level 2

    My dad always said that discount was his prerogative, like giving a present his to give not theirs to expect.
     
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