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
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