Darren Taylor, managing director of Hampshire-based kitchen studio Searle and Taylor, believes that designing kitchens is an art and that designers deserve to be rewarded. He shares his ideas on paying a commission based on gross profit
Over the past 25 years, I have been at the coalface when it comes to the contentious subject of designer remuneration, as I have run both manufacturing and retail businesses, and I am a designer myself.
Reading the many recent letters in kbbreview from other kitchen retailers, it seems that the jury is out regarding how to pay commissions and what is best practice.
And then there’s the question of whether kitchen designers are salespeople or designers. A good few years ago, I recall Martin Gill being asked that very question – a difficult one to answer, as he was then MD of Poggenpohl UK. I was delighted when he confidently responded ‘they are salespeople who can design’. To me, there is no point employing the best designer if they cannot efficiently and assuredly present and sell their work.
That said, there is no point employing the best salesperson if they then create a totally inappropriate design, however much the client might buy into it and them. So this is where, as an employer, it is my job to find and employ creative people who come brimming with personality and who can be trained to become skilled designers that can sell.
I work with a team of designers that understand the sales process and who can also present a stunning design. They are able to sell the ‘concept’ or as we know it – close the deal. I believe this is an art, as our clients are not only buying cabinets, worktops and appliances, they are also buying the designer’s talents. They are investing not only their money, but their trust in that designer’s ability to fulfil the brief and facilitate the process of designing and installing a kitchen project, while making it enjoyable and exciting. This is worth a lot to me, and that’s why I believe in paying a fair basic salary, combined with a good commission as part of the remuneration package.
Responsibility
Larger independents may demarcate the various responsibilities of job roles among a team. So, there will be showroom-based front-of-house staff that meet and greet clients and who book sales leads. Their designers will sit out the back drawing up lovely designs guided by the salesperson that holds the point of contact with the client, and who will present and sell the concept. The job then moves on to the installation department, where surveys may follow and orders are checked and processed prior to installation, then on to after-sales and so on. This may work for them, but my view is to keep it simple, and most of all, I want my team to develop a close working relationship with the customer from the moment they walk in the showroom.
While I appreciate that some businesses prefer to take a more holistic approach to design and are therefore happy to make little profit from their endeavours, I also believe that businesses like ours should be profit centres. This enables us to invest in marketing and have the very best and most inspiring showrooms that feature up-to-date product offerings to create a truly genuine and exciting experience for our clients. We should not be ashamed of making a profit and the team behind you should be rewarded only when profit is made. I advocate a healthy mix of salary and a commission based on percentage of profit, depending on how much of the process the designer can deliver on.
Once the client is happy with their design, has placed an order and paid a deposit, we use an administrative process called a GP (gross profit) sheet (see table).
This details the selling price of said kitchen and the costs to buy in all products. Retail price, less cost of product, equals gross profit. A percentage of this profit is then paid as commission (or some of it, with the rest being paid at the end of the job).
Let’s say a kitchen is sold for £20,000 plus VAT. Then your furniture, worktops, appliances and anything else that’s required is entered and may amount to, say, £14,000 plus VAT. This means that you will hopefully make £6,000 gross profit (a margin of 30%). If the designer’s commission is 10% of the GP, then they would receive £600. If part of a team bonus, this could be split out and shared. Some companies pay at the end of the job once all proposed purchase prices have been checked, and some pay half on receiving the deposit to secure the job. Some state a minimum GP percentage, so that designers cannot sell below this margin. Whatever limit is set, the charges usually come in higher, as projects can sometimes have unforeseen issues and this depends on how much more it costs to keep the job on track – replacement units, another handle, missing lighting and so it goes on. Most of these costs crop up during installation, but that’s a whole other subject for another time.
I have seen all sorts of costs on GP sheets from other businesses, such as delivery, rubbish clearance, designer’s petrol and bank charges etc, but I believe that the ability for designers to make commission should always be fair to all parties. Other companies that I know of that follow a similar protocol are among the most profitable in our industry, and they retain their staff for years. It works for me.