9 benefits of sharing your trade discounts with clients
Here’s a controversial topic that always ruffles a few feathers when I talk about it 🫣
It’s the topic of whether or not to keep your trade discounts to yourself or pass them on to your clients.
I have a very strong opinion on this topic, which goes against what many designers in the industry believe (or do themselves).
But despite what many designers will make you believe, sharing trade discounts with clients is a very common practice in the industry and there are numerous benefits to this approach - from the ability to win more work, increased transparency, higher quality projects and improved client experience.
Whether you're an established designer or just starting out, understanding the benefits of sharing trade discounts can help you to provide better value to your clients and build a more successful business.
Here are 9 benefits of sharing your trade discounts with clients.
1: You’ll win more business
Whether you like it or not, as a designer you are working in a competitive sales industry.
Sharing trade discounts can simplify the sales process by offering a tangible financial advantage for clients to work with you. This results in cost savings for the client, making it easier to sell the benefits of your services and ultimately leading to more successful sales outcomes.
By demonstrating the clear financial benefits of working with you, you will have a more compelling and persuasive sales pitch that will help to convince more clients that you are the best person to work with.
I used to always tell my clients that by working with me they can normally ‘earn back’ almost all my design fees in the trade discounts I’m able to secure for them.
For example:
My fee for your styling project is $20,000. You’ve told me your budget for the furniture and styling is $150,000. But I can get, on average, 10-20% discounts with my supplier relationships for you. As a result, you’ll basically get your design fees ‘for free’ by the savings I’m able to secure for you.
This was a no-brainer for most clients and for every paid design consultation I went to I would turn most of those into higher paying projects. And one of the main ways I did that was by using this as a sales strategy.
Many designers will make you feel like you are ‘leaving money on the table’ by passing on your trade discounts to clients. But in my experience this isn’t true because:
I charged more for my design projects in fees - the ethical and transparent way to make money in my opinion
I won more projects - because I was able to demonstrate a very clear financial incentive by working with me
You only need 5 projects like the one I described above to be making 6 figures per year - not that difficult to achieve when you have a compelling reason for clients to work with you
I ran a profitable design business that made multiple 6 figures a year. Believe me, you can build a very successful business by working this way.
2: It builds trust
Sharing trade discounts with clients can build trust and strengthen the designer-client relationship.
Many designers complain about clients going behind their backs in search of better prices with suppliers, but they don’t realise that their clients are doing this because the industry has a bad reputation.
Clients aren’t stupid!!
And they will appreciate your transparency and honesty. There will be no need for a client to go behind your back in search of better prices if you are already being completely open and honest about how you work from the start.
If you haven’t disclosed that you are keeping trade discounts for yourself then this is a very unethical way of working and not even legal in some jurisdictions (but seek your own legal advice on this as I’m obviously not a lawyer!). Plus working in this way means you are not in a true partnership with your clients and of course they won’t trust you.
This is their money and naturally they are going to try and get the best possible prices they can.
You can avoid all of that headache by being transparent in the way you are dealing with your trade discounts.
3: It’s a competitive advantage
Sharing trade discounts with clients can set you apart from other designers and demonstrate your commitment to providing value.
Lots of designers will make you feel like you are doing something wrong by working in this way.
“It’s bad for the industry” is what you’ll hear over and over again.
But this is rubbish.
The design industry is not well known for being generous in the way it works.
This is your business and you are allowed to run it in whatever way you.
Just because keeping trade discounts has become something that’s done a lot in the industry, it doesn’t mean it’s the right way to be working.
I have always been someone who questions the status quo and how things work.
Personally, I have always wanted to optimise my design business for client experience and satisfaction, not for how much money I make.
The natural outcome of optimising for client experience is that I ended up making more money (it’s the natural flow on effect of putting the client first).
So passing my trade discounts on in full was the right decision for me and won me a lot of work.
4: Keeping trade discounts is a potential conflict of interest
Consider this scenario…
You are a designer that keeps trade discounts to yourself and doesn’t pass them on to your clients.
You are now choosing between two sofas for your client’s project:
the first sofa is the best option - it’s the right shape, size and fabric and it would be perfect! It is $10,000, but you only get a 10% trade discount with that supplier (so you only make $1,000 on that recommendation)
the second sofa is OK and it will still work in the scheme but it’s not as perfect as the first one. But this one costs $15,000 and you get a 20% discount with that supplier (i.e. you’ll make $3,000 on this recommendation)
As a designer that keeps your trade discounts, which sofa do you end up recommending to your client?
I’m sure you’ll say you will choose what is in the best interests of your client, but I call bullshit on this.
If you are financially incentivised to pick the less perfect option, that makes you more money, then most of you will go with that option every time.
This is a massive conflict of interest, not to mention unethical.
Keeping the trade discount will raise questions in your client’s mind about your motivations and the objectivity of your recommendations.
But sharing your trade discounts avoids any of these problematic decisions. Because you will choose the one that is actually the most perfect for the space - not based on the one that makes you the most money.
If you keep your trade discount for yourself, the client may not know if you are selecting products based on their best interests or your own financial interests. This can undermine the trust and confidence the client has in you and will definitely impact your relationship.
Clients are very savvy and can easily work all of this out themselves.
And this is why they go behind your back looking for a better deal!!
5: The budget goes further = better project outcomes
Because clients will be getting your trade discounts it means that everything you are choosing and purchasing together costs less for them to purchase.
And with a larger budget you will have more flexibility to choose the best products for the project, which can lead to a higher quality finish and better project outcomes.
Basically, it means their budget goes further, which means your projects will look better!
6: Reduces paperwork + administration
Sharing your trade discounts can also help to reduce the administrative burden and paperwork associated with your projects.
If you keep trade discounts for yourself you will need to invoice the client for the full cost of the products and then deal with all the invoices that come directly from the supplier as well.
This can result in duplication of effort and additional administrative overhead.
But by sharing the trade discount directly with the client you can simplify the invoicing process and reduce the administrative burden of the project by forwarding the supplier invoice on to the client for payment.
7: It’s a better client experience
We work in a client services industry and the number one goal for every designer should be how to make the client experience the best possible thing ever.
Sharing trade discounts with clients can help to foster better relationships and open up opportunities for future projects.
Also, by being transparent and open about the discounts available, you can prevent clients from seeking better deals elsewhere and potentially damaging your own relationships with suppliers. Additionally, by working with you clients can benefit from your expertise and knowledge and potentially secure better deals than they could on their own.
This can also result in increased client satisfaction.
Remember - happy clients are the ones that will talk about you and tell everyone they know about you, which means you’ll be getting more and more work without putting in any additional marketing efforts.
8: It’s good for your brand and reputation
The industry has a bad reputation when it comes to the issue of passing on trade discounts.
But designers who prioritise the best interests of their clients by forming true partnerships and operating with integrity will be rewarded with a positive reputation and a loyal client base.
You will also demonstrate your commitment to ethical and honest business practices, which can be particularly important in a competitive industry where trust and credibility are critical.
In addition, by providing value to clients through trade discounts, you can establish yourself as a provider of high quality services that look out for the client's needs and interests above all else. This can result in increased customer satisfaction and positive word-of-mouth referrals, which can be a really valuable source of new business.
9: It’s potentially unethical and unlawful to keep your trade discounts
Whether it is unethical or unlawful for you to keep your trade discounts depends on various factors, including the laws and regulations in the jurisdiction in which you operate as well as your professional code of conduct and ethical guidelines. So make sure you know the law!
In some cases, keeping trade discounts may also be considered unethical or a violation of professional standards, particularly if you are not being transparent with your clients about the discounts available and the true costs associated with the project.
In various industries there have been regulations established to address conflicts of interest and unethical behaviour in product recommendations. This includes issues related to trade discounts, where a professional may recommend one product over another because they stand to gain a greater financial benefit. These regulations are put in place to ensure that professionals are acting in the best interests of their clients, rather than promoting products that may be less beneficial for the client but more profitable for the professional.
In financial services, for example, financial advisors are legally required to act with integrity and provide impartial advice to their clients. This includes disclosing any potential conflicts of interest, such as any commissions or other incentives that may be received for promoting a particular product or service.
Although the design industry doesn’t have these sorts of regulations in place yet (as far as I know), there is a high chance that the industry will become more regulated over time in order to protect consumers.
Many designers don’t have their trade terms disclosed honestly in their contracts and this is obviously not only potentially unlawful, but it’s also highly unethical.
So make sure if you are keeping trade discounts that this is clearly disclosed in your contract and that your clients are completely aware of how you are working with their money.
By the way - even though I don’t agree with keeping trade discounts if you are doing this yourself but you are completely open and honest about how you work and have this all clearly documented in your contract that your clients sign AND your clients still decide to work with you on that basis, then this is obviously not unethical and every business owner is entitled to run their business in whatever way they would like. The issue I have with this is with those designers who aren’t disclosing the way they work with trade discounts to their clients (which are many designers in the industry).
In terms of legality, it is important to make yourself familiar with the laws and regulations in your jurisdiction, as some jurisdictions may have specific rules around trade discounts and how they should be handled.
Also - don’t just copy what you see others doing in the industry as many of them are only working that way because they see others doing it like that or because they see it as an opportunity to make more money. Always do you own checks to make sure the way you choose to work isn’t exposing you or your business to risk.
Remember I’m not a lawyer and none of this is legal advice so make sure you get your own advice on all of this.
Overall, it’s my strong opinion that sharing trade discounts can help to establish you as a transparent and ethical designer who is focused on providing value to your clients.
And in my personal experience of working like this, it can result in a positive brand image and increased business opportunities.
Lots of designers will try and tell you that sharing your trade discounts is ‘bad for the industry’ or that ‘you will be leaving money on the table’ - but this is all rubbish.
You can grow an extremely successful and profitable design business by working in the way I’ve described in this post.
The reason I know this is because it’s exactly the way I used to run my own design business!
Thanks for reading and catch you in my next post :)
Clare x
Dr Clare Le Roy
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