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The Trade Discount Dilemma for Interior Designers: Keep or Share?

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The world of business is built on relationships, and for many industries, trade discounts are a key component of building strong client connections, as well as selling your services! But the handling of trade discounts is controversial in the industry: should you pass these savings on to your clients, or keep them to boost your own profits?

There’s no magic answer, and the truth is, it depends entirely on your specific business model and goals. This blog post will look at the pros and cons of both approaches, helping you to make an informed decision about what’s right for you and your business.

Sharing the Savings: Building Trust and Loyalty

There’s a reason the saying goes “happy clients are repeat clients.” By extending trade discounts to your customers, you’re essentially offering them a tangible benefit for working with you. Not only does this help you to advertise and market your services, but it also strengthens your relationship, potentially leading to long-term partnerships and referrals.

Here’s how sharing the discount can be a win-win:

Client Satisfaction: Who doesn’t love saving money? Passing on the discount shows your client that you have them front and centre of your considerations. Imagine how they will feel about having saved so much money – and of course this is going to make them more likely to rave about you to their friends.

Marketing Kudos: Highlighting the huge cost-savings you provide for your clients is an amazing marketing tool. This can be a powerful differentiator in a competitive market.

The Profitability Factor: Keeping Your Margin in Mind

However, sharing the wealth can come at a cost. Trade discounts often represent a significant portion of your profit margin, particularly in industries like furniture, fixtures & equipment (FF&E) procurement. Here’s where the potential downsides come into play:

  • Reduced Profits: This is the most obvious concern. By giving away the discount, you may be sacrificing a huge chunk of your income.

Keeping the Discount: Building Value and Premium Services

There’s an argument to be made for keeping the trade discount. Here’s why some businesses choose this approach:

  • Control Over Prices: Keeping the discount allows you to set your own prices, potentially offering premium services with the additional profit margin.
  • Increased Profitability: The financial benefits are obvious – you get to keep more money in your pocket, which can be vital additional income, or be used for reinvestment and growth.

Transparency is Key: Building Trust Regardless of Your Choice

So what to do? Well, whatever you decide, the key to navigating this dilemma lies in transparency. Regardless of whether you share the discount or not, be upfront with your clients about your pricing model. Here are some tips:

Be Prepared to Address Concerns: Clients might suspect a markup if you don’t share the discount. Be prepared to explain your pricing structure with confidence.

Clearly Explain The Value You Bring: Focus on the unique value you offer beyond just cost savings. What is the transformation you are bringing and the service you are providing? 

The Final Word: It’s Your Business, Your Decision

Ultimately, the decision of whether to share trade discounts rests on your individual business goals. Weigh the pros and cons carefully, consider what works best for your situation, and most importantly, be transparent with your clients. As long as you have thought it through and have a clear rationale that you feel comfortable with, you will make a success of it. 

If you’d like to navigate the waters of growing a flourishing interior design business with a community that’s got your back, be sure to check out our membership Hub Insiders. 

Ready to Start Your Interior Design Journey? 

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For those looking to develop their business skills alongside their design expertise, our Hub Insiders membership programme provides ongoing mentorship and resources for growing your interior design practice. 

About the Author 

Kate Hatherell is the founder of The Interior Designers Hub and a qualified interior design professional with extensive experience in the industry. She has helped hundreds of students transition into successful interior design careers through The Interior Designers Hub’s UK government accredited Level 3 Diploma in Professional Interior Design and the Hub Insiders business membership programme. Kate is also a consultant and professional advisor to AIM Qualifications & Assessment Group, providing industry insights to the development of new interior design qualifications in the UK. Kate also runs SketchUp training courses, which are used by students across the world. She is committed to providing practical, industry-relevant education that prepares students for real-world interior design careers.