Kickbacks and Commissions in the Wedding Industry

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.

If Mr. Photographer decides to live on less and have fewer expenses, he probably won’t be able to update his equipment as often which means he’d potentially be shooting the weddings with out of date/slower/less advanced cameras, maybe he doesn’t print at the highest quality printer anymore which means the prints aren’t as crisp and gorgeous as the ones you saw in his books, maybe he downgrades his albums but charges the same which means fewer pictures on fewer pages for you or an inferior book – all things that affect the quality of your pictures and your memories.

If Mr. Photographer decides he needs to make more money, he can either mark up the KBP’s client’s fees or book more weddings to make up the money lost to the kickback.  If he marks up the KBP’s client’s fees, you are suddenly paying $3450 for a package that is costing everyone else (including a non-kickback accepting planner’s clients) $3000.  Nice.  If Mr. Photographer decides to book more weddings to make up the fee, he has more clients to take care of and more weddings to edit.  Remember those meetings and engagement shoots where Mr. Photographer really got to know his couples?  Not as relaxed and maybe even not included in the package for free anymore.  That one month turnaround on pictures?  He now has more clients he has to take care of and edit for as well so that might be closer to two months.

Either way, that free or super cheap planner doesn’t sound like such a great deal any more, does it?  If someone is offering you something for free or for WAY less than everyone else, ask them why.  Remember, you get what you pay for and sometimes you wind up paying a lot more than you bargained for.

Now consider the same scenario with KBP and a vendor like a florist where there are no set packages – if they are charging the florist 15% of the order, what keeps the planner from nudging the final amount you spend on florals as high as possible so they make a bigger commission?  How do you know the suggestions for additional items they are making aren’t just to pad their bottom line?

So, how can you tell if a planner is taking kickbacks or commissions or referral fees?  Ask them.  Look them in the eye and ask them how they make their money and whether they take money from vendors for referrals.  If they tell you they are vendor supported or do take kickbacks, it is up to you as to whether you want to work with them.  You might also ask your other vendors whether a planner you are considering has ever asked them for a kickback and their opinion on the topic.

This topics has been covered by many others in the past – some of my favorite articles that deal with kickbacks and the like:

Becker, Sean Low and Outstanding Occasions as well as the one I linked to above from Preston Bailey.

Let me be VERY clear about this – I disagree with the practice of kickbacks, commissions and referral fees and have never accepted or requested one.  That is not going to change – Emilie Duncan Event Planning does not and will not accept kickbacks from vendors. This is an issue of trust and transparency – just make sure you know what you are getting before you sign on the dotted line.

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