Transparency: Planners Event planners IV

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 Example:

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?

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  • http://www.grandillusionsweddings.com Heather Chesnet

    My only question is… would you be confirming that the vendor is indeed doing what they are accused of before you put their name out there? In the competitive world of wedding planning I can imagine some of the shady planners would be quick to throw names about falsely. I don’t want my business damaged because someone says I am doing something for which I am not!

  • http://YOURWEBSITE lara

    WHAT WOULD YOU LIKE TO SAY?

  • http://jtcakes.com Jeanne

    I would be more likely to put my own name on a list of vendors committed to not paying a fee to a planner in exchange for referrals and business.

  • http://www.romantictravelbelize.com lara

    You know, dear Preston, how i love you. I do. I really do. But i have to say, i think you are rather unfairly painting an entire international business with a very broad, inaccurate, brush.

    I only work on commission. Period. I dont charge my clients a dime for my services as i make all my money on the hotel, transfers, tours, and other large ticket items for the client as well as their bride. In this case, i am MUCH more affordable for the client, and 100% more transparent. The client and the vendors, when it comes to a destination wedding, value the relationship that i have with both of them. My role is to identify and eliminate any problems that occur when things get “lost in translation”. By working only on commission, with ALL vendors in the entire country, the bride and groom get a 100% unbiased honest opinion as to which property and vendor makes the most sense for *them*, not me.

    for me, to charge a fee is a much less fair way of doing business. Clearly this is a hot button for you, as the amount of passion – and dare i say venom – are coming through….but while it may make sense in some cases, you are disparaging a very large sector of the business. If my clients read your post they will assume they are just carte blanche getting schnookered, when in fact, i PREVENT them from getting schnookered.

    i love you, but i not only disagree with you, i find you are putting forth an opinion that may not be as well thought through as you think. I ask you to think your position through from another, internationally culturally different perspective as you do have a huge international following.

    The fallacy of the excluded middle here is this – Yes it is not only possible but appropriate for some people to work on commission.

  • http://YOURWEBSITE Gloria

    I think that anonymous posting of planners will open a site up to a new number of potential legal problems.

    I’s rather see this positioned as a positive thing. I think that posting and promoting a list of industry standards and best practices, check-lists for clients and a list of Planners and Vendors who endorse these standards would be better.

    All the best Preston.

  • http://YOURWEBSITE Gloria

    Forgive the typos, please!

  • http://www.fatamadrina.it Barbara (@fatamadrinawp)

    I don’t work on commission and in my experience in my country (Italy) most planners working on commissions are a bit shady and often go the easy route (i.e. sponsoring vendors they know will provide the best commissions rather than the ones most suitable for the project). I also find that claiming they provide a *free* service (yes, that’s what they claim) without explaining the commissions system undermines the credibility of our profession.
    That being said I also know (a few) planners working in commissions who are transparent about it and fair to all. In this perspective I agree there are shades to this issue and not everything is black and white.

  • http://www.CherishableWE.com Amanda

    I don’t work off commission at all, but I will give vendors (and current/past clients) a gift when they refer customers to me who end up signing a contract. I have had vendors give me gifts as well (checks, gift basket) when I refer clients to them.

    I don’t hide this from my clients at all and these gifts have no effect on my clients events. This is because this is a part of my marketing budget (if I didn’t do this, I would have to spend more money marketing elsewhere).

    I believe that being deceptive about it, and certainly sending a bill (which I have never heard of and think that is absolutely absurd) is terrible, but I think it is a rare case. I think most planners fall in the middle of the commission scale.

  • http://www.joliepapeterie.com Nicky

    I think there needs to be a site to submit all types of shady vendors and the option to submit anonymously. Obviously you would need proof to back it up or it would be a bunch of vendors calling each other out and could get messy.

  • http://www.luxurychildrensparties.com Samantha

    I’d never list someone’s name or biz name in public. Even if I stayed anonymous…to me that’s cowardly anyway. Own up to what you say.
    This also brings up the old discussion of should this industry have a governing body and set rules and regulations? I bet I know what the majority will be.

  • http://www.alewisevents.cocm Andria | Andria Lewis Events LLC

    Lara -

    I don’t see where the blogger is painting with a broad brush. They specifically said ‘some’ planners and then encouraged the client to simply ask their planner if they are accepting kickbacks.

    You are speaking of what works in your market and that’s fine. It sounds like your clients know how you charge and that works for you. That doesn’t work in all markets.

    However, Preston Blogger Person, starting a site would be insane. You cannot determine who is giving you good information. And you don’t know from client to client if a planner (or other event pro) has told the client if they are accepting a kickback on their event. This post is informational enough. Clients know to ask. Bottom line. Leave it alone. Done.

  • http://YOURWEBSITE Katrina

    I do believe that would open up a can of worms.. their are plenty of shady business owners.. not just in the wedding industry. It is left up to the true professionals to educate our clients so they can look out for the shady, unprofessional, and unqualified ones, that make the rest of us look bad.
    Lara, I do believe he is referring to those under the table commissions the client is unaware of. If your clients are aware that you get a commission of their services then you are not being shady.

  • http://www.smoothweddings.com Smooth Weddings, LLC

    It is stated in the material I give my clients at the initial meeting that I do not accept referral fees from any vendor I refer them to. This way, they know this right away before they even hire me.

  • http://Www.marcecooksplace.com Ricardo Rivera

    Dear Preston, I have been doing events for the last 11 years and I do think exactly like you, I have never accepted a commission nor ask for any commission, I think I have lost some events because I did not agree to give commissions, but at the end I think I had win a lot more on reputation and respect from my customers and all the event industry in my area, and for sure I’m interested in helping you to keep our industry honest and fair, also I have the courage to name this shady vendors.

  • http://YOURWEBSITE Latisha Harrison

    It sounds like you are referring to a website similar to the better business bureau or Yelp. There are lots of sites similar and having one geared toward events would be a good thing. There’s always a risk of someone with a gripe to post unfairly but they can do that currently on sites like Yelp. There’s pros and cons to technology. I think it would do more good than bad to have a site calling out shady vendors. It would also help honest planners charge their true worth without being undercut by shady competition.

  • http://YOURWEBSITE Angela

    This is a really interesting topic. However i know it is prevelant where i come from. I initially did look down on it, but then again really did not know what to say to those who practice it. In my country, clients are willing to pay you peanuts to manage their event, but willing to spend tons of millions on other aspects of the wedding. However cos the market is so competitive, the only way most planners can make money to survive is to reduce their fees and get commissions from the vendors. Not saying this practice is right, but what do you do in a situation like this where planners are still looked down upon and our industry has not grown as big as what you have in the states..

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  • http://www.centerofattention.com Michele Fox

    Well this is a sensitive subject because I started out as a caterer and I would happily give a discount to a vendor who is selling for me because it is a better business to give a discount on real business than pay for advertising they may or may not bring in business.

    Now that I am a planner I fight hard for discounts from my vendors. I pass them along to my clients so that they feel I am working to get them the very best products and the best price I can. I have no trouble fighting for the best deal for my client. And yes, if I find two vendors with the same service/product I will give pass along the client who gives the discount to my client.

    At the end of the day client’s need to know that the average business need to make 15-25% to keep in business. The lesser amount is for a planner who works from home with limited staff the higher amount for a planner with an office and staff. There is a higher price for higher service.

    Great post.

  • http://www.eventuresinc.net julia Hewitt

    I would certainly join this group- even though I know you are not intending to start it. I am a planner in LA and I am constantly losing out on jobs because people think my prices are too high. I choose to have an honest relationship with my vendors and use them because they are talented not because I can make money from them Everyone tells me I am wrong. But at the end of the day I have to look at myself in the mirror and be OK

  • http://www.blissmaui.com Darren

    My business partner and I have been in business for 2 years. The first year we followed what other people in the industry told us – to take these fees, so we did. After the first year we felt uncomfortable doing this and after one year of business we changed the way we operate and only charged a commission at the end. We found that the vendors that we work with are happier and more willing to put their heart into their work…as I know this too well as I started out in the business 8 years ago as a floral designer and now doing design and coordination. I don’t really mind what others do – they have to be comfortable with who they are as I have to be comfortable with who I am. I look at it as the right clients will come to us…

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