Kickbacks: What Wedding Planners, Vendors and Clients Should Know

Read this article we found about vendor commissions:

UPDATE (in response to some people saying we are giving wedding planners a bad name): Not all wedding planners operate in the way described below. We own a wedding planning business and have chosen not to accept commissions. You may disagree and that is okay. We would love to hear your thoughts about the subject either way!

The other day I was talking to a wedding professional that had been contacted by a wedding planner.  The wedding planner wanted them to meet their client to discuss their product/service.  The wedding professional met with the client and later received a phone call from the wedding planner.  The planner asked “What will my commission be?” to which the wedding professional replied “Commission, what are you talking about?”  The planner replied, “Well, I referred the client to you and so I want to know what you will be paying me for the referral?  I “earn” a commission from all of the event professionals that I work with.”  Much to the wedding professional’s dismay, the wedding planner was NOT joking.  They wanted to get paid.  The wedding planner made it very clear that if the wedding professional did not pay them for the referral, their client would not be working with them.  The wedding professional was angry and shocked and decided not to work with the client or the wedding professional.  (YAY!  I was so proud of the wedding professional for standing up for what they believed in and not giving in to the planner!)

So in case you are unaware, here are the facts:

There are some wedding planners (and a lot more than I originally thought) that charge wedding professionals/vendors a fee for referring clients to them.  Here is usually how it works with these planners that accept a kickback (also often referred to as a commission or a referral fee):

1.  Client hires Wedding Planner. (For example, Client pays Wedding Planner $7000.)

2.  Wedding Planner refers Wedding Professional/Vendor to Client.  (Wedding Planner refers Client to Photographer, who they often refer for their events.)

3.  Client hires Wedding Professional.  (Client hires Photographer.)  Client may not (and usually does not) know that Wedding Planner accepts money from Wedding Professional for referring them.  It is either a flat fee or a percentage of the amount received by the Client. (Photographer pays Wedding Planner a fee of $500 for referring them.)

4.  Usually, the Wedding Professional will charge the Client a higher fee to cover the fee (the kickback) they have to pay to the Wedding Planner.  (Photographer charges Client $6500 instead of their “regular” package price of $6000.)

5.  Sometimes, as in this case, the Wedding Professional does not know about the kickback prior to meeting with the Client and quotes them their regular package price.  If the Client books them, they have to pay the fee out of their “own pocket.” (Photographer meets with Client and doesn’t know that Wedding Planner will demand a kickback so Photographer quotes the Client $6000, the regular package price.  Client books and now Wedding Planner demands that Photographer pay $500 to them for the referral.  Photographer now has to take $500 from the $6000 they received from Client and pay it to Wedding Planner and therefore, they only get $5500 from the sale.  Photographer has now cut into their profit from the sale.)

http://www.outstanding-occasions.com/business/2010/06/kickbacks-what-wedding-planners-vendors-and-clients-should-know/

Wedding Vendors and Commissions

Most wedding planner has certain vendors that they like to recommend to clients.  This is a good thing usually because they might provide discounts or have good deals.  Sometimes these wedding planners charge a commission from the vendors for getting them business, which could be a bad thing.  It is hard to tell if wedding planners are recommending vendors for their excellent quality, or because they are getting paid off.  

http://www.myelitewedding.com/blog/should-wedding-planners-accept-kickbacks-or-commission-from-vendors-2/

Kickbacks and Commissions in the Wedding Industry

We found this interesting article about kickbacks for wedding vendors.  Read here:

Preston Bailey did a blog post yesterday on transparency and vendor kickbacks and fees and it prompted me to pull out a post I have had sitting in drafts for a while.

It is a dirty little secret of the industry that some planners charge kickbacks to vendors in order to recommend them.  It is more common in cities on the coast but it is certainly happening here in Columbus as well.

This is long so click below to read more….

So, here is how it works – a planner charges a lower fee to a couple (usually WELL below market value) and then the planner shakes down vendors for kickbacks and referral fees.  They will then push those vendors that are willing to pay the kickbacks onto couples whether they are a good fit for the couple or not.

Let’s be honest here – this sucks.

A professional wedding planner charges a fee to the couple and then represents them and their best interests during the planning.  In my opinion, a professional planner should not take kickbacks or commissions from vendors for recommending them.  If they do, you have to ask is the couple getting the best fit for them in the recommendations or the best fit for this planner’s bottom line?  And in the end where does the planner’s loyalty lie?  If they are taking money from people other than their client – their loyalty isn’t with their client and it becomes a huge conflict of interest.

Beyond dealing with a dishonest planner, there is another reason this is a bad idea for you as a bride or groom.  It will likely cost you money and/or quality of service from the vendor.

Consider this scenario – Mr. Photographer charges $3000 for their most popular package.  Most business people know that they are going to need to work with a certain number of clients at a certain price to make a living.  If Mr. Photographer usually books 25 weddings a year at $3000, he will make $75,000 gross.  Take out at least 1/3 for taxes, at least another 1/3 for camera equipment and studio rental and albums and prints and other general business costs and he is likely taking home less than $25,000 a year.  Also, only shooting 25 weddings a year allows him to meet with each couple and really get to know them through meetings and engagement shoots, allows him to edit every picture to perfection and means he averages about a 1 month turn around time on pictures.

So, Kickback Planner (KBP from here on out) comes along and says, I need 15% of your fee to recommend you.  If Mr. Photographer agrees and KBP’s clients book him, Mr. Photographer is only going to make $2550 on that wedding.  Now, let’s say that KBP brings him 15 weddings out of the 25 he normally books.  His gross profit drops to $68,250 for doing exactly the same amount of work! Heck of a pay cut for doing nothing different, huh?

Mr. Photographer now has two choices: figure out how to live on less money and have fewer expenses or find a way to make more money.

Read the rest of the article:

http://blog.emilieduncan.net/kickbacks-and-commissions-in-the-wedding-industry