Dear Dakota | How Interior Designers Can Calculate A Flat Rate for Freight, Receiving and White Glove Delivery Fees

Nov 3

Bill shipping, warehousing, + delivery upfront when you invoice for furnishings. How do you calculate these fees? The answers should already be in your financial software. Run reports for previous projects and see how the shipping/freight and receivi

Dear Dakota,
Our clients feel nickel and dimed paying for freight, receiving, storage, and white glove delivery. I want to consolidate these costs and collect them when invoicing for the product. How do I calculate what this number should be?

My Response:

Great question, and you know I’m all about reducing friction throughout the design process. There is nothing worse than your interior design client feeling like every time they talk to you, they’re pulling out their checkbook to pay for something.

Definitely not a luxury experience.

So, in an effort to reduce the times an interior design client has to “transact” with you during their service (and feel like they’re being nickeled and dimed), it’s essential to consolidate and time your billing process so invoicing makes sense to your client (and creates the least amount of friction and work for you).

When it comes to shipping, handling, freight, receiving, storage, and white glove delivery, think about what consumers typically encounter when they buy furnishings from an online retailer where they often can’t sit in or touch and feel the final product.

They put things in the cart, see the shipping fees calculated, and then if it’s a furniture piece, they see the cost for white glove delivery added to the total. Or, if they are in a brick-and-mortar store, they communicate with a salesperson about the purchase price plus delivery. They check out, pay for everything all at one time, and then receive a notification when their furniture item is ready for delivery by a local carrier. They then coordinate a time for that piece to be delivered, have to wait at home for the delivery window, and then are home to oversee the crew and ensure any debris is taken away (if that’s included).

They pay for their furniture and delivery in one simple transaction, and they’re done. Then they just wait for it to arrive.

So, when your transaction process with a consumer differs from what they are used to, it’s natural to get pushback.

If your process for collecting shipping fees and receiving fees is a hot mess, you may hear questions like this from your clients:

“WHY are you charging me for more shipping when I already paid shipping when I paid for the furniture?” This is especially relevant if you ESTIMATE shipping at time of furniture invoice and then collect any remaining balance due for the ACTUAL shipping amount at the time of delivery…sigh…don’t do this.
“Why am I paying for delivery? I thought I already paid for shipping?”. This is common if you charge for shipping/freight when you invoice for furnishings and then receiving and white glove delivery on delivery or install day.
“I was shocked to get a $6,000 bill for receiving and white glove delivery after the install. I thought we’d already paid for everything. That was a big hit.” This is more just a general comment about how it feels for clients to get hit with a big invoice for something “boring” months after they purchased their furnishings (rather than paying for it when they knew it was directly tied to the products they purchased.)

So, in thinking like a retailer (hi, you are a retailer if you sell products), how can you create an experience similar to what your clients are already familiar with so as to reduce frustration and confusion from clients?

Well, you bill all those fees (shipping, warehousing, delivery) upfront when you invoice for furnishings.

One transaction. Just like they’re used to.

Not only does this mirror the experience they are used to when making purchases, it also presents all the fees when THEY ARE THE MOST EXCITED ABOUT THE DESIGN!! They can now see what their future space will look like, and they cannot wait to have it come to life. They “understand” the fees. They are eager to move forward. They want to get the ball in motion for their room to be completed.

The other benefit of billing these fees when you invoice for furnishings is that it requires MUCH less work on your end later in the project.

The catch is — when you invoice for furnishings, it’s often way before the shipping and delivery of those items actually happens. So, you don’t yet have those charges documented by your vendors, shippers, receivers, and delivery providers.

So, how do you calculate these fees so you’re covered?

Easy! The answers should already be in your financial software.

Run reports for previous projects you’ve installed, and see how the shipping/freight and receiving fees lined up in relation to the amount of furnishings you invoiced the client for. How much were the total shipping/receiving/delivery charges for the items you sourced?

If you work with a specific receiver who also provides delivery, look very carefully at the sum of those charges for several projects.

You’ll likely start to see percentage ranges that are pretty standard across all your projects.

If you don’t have this data (or your books are a bit of a disaster), you’ll want to put pencil to paper and do some calculations yourself to calculate the shipping/freight typically charged by your vendors and the receiving, storage, and delivery typically charged by your receiving warehouse.

You can then add those numbers together (shipping/freight + receiving/delivery) to see how they align with the amount the client pays for each item.

You would add that percentage to the client’s price and it would cover them for shipping, handling, freight, receiving, storage, and white glove delivery.

—> Now, you’ll want to spell out your policy around these fees in your interior design contract, and you’ll also want to specify how many days of storage are included in that flat rate percent. Be sure to read this article on how to bill for storage fees and install day when there are major delays.

→ Then, when preparing invoices to present to your client, simply add that flat rate percent to all items you or your receiver will be receiving, inspecting, storing, and delivering.

***You may notice I specified adding this fee to items YOU or YOUR receiver are receiving, inspecting, storing, and delivering. I don’t mention window treatments that are being made and installed by your workroom, cabinetry that is being built on-site by a carpenter, or custom pieces that are being made locally and will be delivered/installed by the artists themselves. I’m talking about items YOU or YOUR RECEIVER will be receiving, inspecting, storing, and delivering.

Here’s the thing: You know how clients react when they get shipping invoices throughout a project and then a big receiving and white glove delivery bill at the very end. Or, how they feel when they get a bill from the receiver only to think they had already paid that when they paid for shipping/freight. It should be a priority to make that process easy for your clients to understand and, of course, for you to be transparent about what fees they can expect. There should be no surprises for your furnishings design clients when it comes to their money.

I love this saying:

“Cry once and love it forever.”

You do that by charging the client for the item and the fees when they approve the design, and then the install day will feel even more magical because look what you just did to their home. And because they last paid you months ago, writing a big check won’t be the last thing they remember about your company; walking into their completed beautiful space will be.