As we continue on our theme of transparency, I want to start the week off by exposing one of the dirtiest little secrets in the event business: Planners charging vendor fees.
Though it’s kept hush-hush, it’s not uncommon for planners who collect a discounted fee from their clients to subsequently collect a commission from each of the vendors–without their clients ever knowing of the exchange.
I first encountered this practice over two decades ago when I was new to the industry and just starting to establish my business. I was working on an event with a very well-known planner who sent me a bill, claiming that I owed her 15% of the total amount my client spent on flowers. Thanks to my ignorance, naïveté or both, I sent this bill to my client, thinking this was another expense. Needless to say, my client was furious.
Fast forward twenty years and this dubious practice is still in effect.
So, how does it work? Very simple.
These dishonest planners charge their clients a much lower fee than their honest counterparts in order to secure the contract. Thinking they are getting a deal, their unsuspecting clients eagerly signs up and ultimately wind up being shortchanged.
An honest planner charges $30,000.00 for an event and does not collect any commissions for their hard work.
On the other hand, a shady planner will charge $15,000 and collect another $40,000 from all the vendors on commission “under the table”.
If you are a client reading this, it’s important to understand that while it may look as though you are getting a deal, you are ultimately going to wind up being shortchanged working with someone who is both deceptive and willing to cut corners to benefit themselves. You could help stop this practice by asking your planners to agree not to collect any additional fees from vendors and to put this agreement it in writing.
I’m considering starting a new site where those interested in helping me to keep our industry honest and fair can submit the names of deceptive planners (anonymously). If I started such site, would you have the courage to name these shady vendors?