Are you confused about how Designers price items?

Ever found yourself secretly asking, "Who do you think you are?" when you've seen some Designer's list their fees?
Well I'm blowing the lid off of Pandora's box with today's Design Confidential. 
And here's your scoop:

Designers generally charge for their services in one of 3 ways. These are:
Hourly: Designer is paid per hour spent on your project. This is generally estimated upfront and clients either pay for their service in full or on retainer (meaning that they pay for a certain amount of hours up front and the remaining hours are billed in increments), depending on the guidelines set forth by your designer. Depending how the scope of the project changes (and how drawn out the clients make the selection process ) the amount of hours can vary slightly from the original estimate, but a good designer will keep you abreast of the hours so you know when you're reaching your limit.

Flat fee (value-based): As it implies, this is a flat fee based upon the scope of the entire project. There is no accounting for hours, the designer simply provides a flat-fee cost based upon 2 components: (1) his/her assessment of the client needs, spatial requirements, degree of difficulty, turnaround time and (2), the designer's experience & qualifications.  The ultimate number is always going to be relative but generally speaking, when a client hires an Interior Designer he/she is selecting that professional for specific reasons and more importantly, NOT selecting another designer for those same reasons. There is a value that each designer brings to their work that is based upon several variables and the thought is essentially--if you want me, this is my price, take it or leave it.
Square footage: Your designer has a set price per square foot and your design fee is based upon his/her rate per square foot multiplied by the amount of square footage on your project.  Their r/sqft is based on the designer's experience/qualifications and time/skill needed to complete your project.
+Markup: This is such a dirty word for clients but markup is the price above the designer's cost (which may be wholesale OR retail depending on where your designer shops) that the client will pay to complete their project. This is generally charged in addition to one of the other forms and ranges from 20%-30%. Some designers will charge a lower design fee and then charge a markup while others will charge a higher design fee upfront and then extend their trade discount (ranging from 10%-50%) on to their clients--it's really 6 in one/half dozen in the other (i.e., there's no difference) but the important thing to know is this--you can't get around paying a markup on product. Sometimes clients will want to purchase items on their own to avoid the markup fees (which is a no-no and generally explicitly prohibited in a designer's contract) but not only is it wrong, it's about the equivalent of going to your favorite BBQ spot and asking the folks behind the counter to "tell me where you get your BBQ sauce so I can by it myself, and I'll bring my own so we can just subtract that from the cost of my meal."
Uh, ma'am?

Please take a seat.
(take several!) 

When working with a designer, make sure you understand their fee structure but know that there is no right or wrong way to charge--these are all standard and fair practices in the world of Interior Design (and any sales course will teach you, you're worth what someone is willing to pay, inflated or not!). Keep in mind that your designer is doing all of the leg work to scour their resources (some you may know of, some you may not) to find you the best furniture/accessories for your project and there are fees associated with that--both for intellectual property & actual shopping time. In the end you'll pay more than you would if you'd tackled the project on your own, but you'll also love it more.
And in my opinion, creating a home you love is always worth the investment. 

Any questions?? 
(and if you've worked with a designer before, I'd love to hear about your experience!)
(calculation formula borrowed from here)