We are redoing our kitchen from top to bottom, and I was recently reminded of something that I discovered back in early 2005 when I sold my company Prophet.
Early in the process, I decided we had better get an experienced kitchen designer. I asked our contractor, whom I’ve worked with many times before, and he directed me to two women in San Francisco who did this for a living. I contacted them for a visit so I could find out what it would cost them to design the kitchen.
The two ladies came down, and I explained to them clearly what we did not need. We didn’t need help with picking out appliances, or choosing lights, or even figuring out the layout. Indeed, the cabinets were going to exactly match the existing custom cabinets we had in our family room, so there was no design work there either. All I needed for them to do was created drawings my contractor could use to build the cabinets. In my head, having never worked with designers before, I figured it would be a couple of thousand dollars to get some drawings done.
After about a week, they got back to me and said they’d be pleased to do the drawings for $26,200. I just about fell over when I saw that quote, but they wouldn’t budge. I debated with myself, wondering how I could have been so wrong. Was this vastly more complex than I imagined? Was I that naïve?
I then sought, on my own, another designer for a second quote, so I could at least get a sense as to whether this was the industry norm. I met with a few of them, and I got a couple of more price quotes. They visited the same kitchen, and they heard my same speech about what I did and did not need.
The quotes came back, and they were, respectively, $4,500 and $1,900 to do the work. The $1,900 person was exceptionally well-reviewed and personable, and as I sit here right now writing these words, I have an enormous printout of these plans in front of me, which is precisely what I wanted. We meet with our contractor later this morning to start the project (which I am certain is going to generate a post or two this year, since our lives will be partly turned upside-down).
So how on earth could one service charge almost 14 times as much as the other for the exact same work product? Were they 14 times better? 14 times more capable? Not at all. I think it’s simply what I would call a Rich Person’s Premium.
In other words, there are a ton of very rich people that live in San Francisco and up and down this peninsula who wouldn’t bat at eye at hearing the $26,200 price quote and writing out a check at once. (In point of fact, I bet if the ladies were at some splendid house giving a quote, it would have been far higher, since they could get away with it). They’d figure the price is the price, and they aren’t about to debase themselves to try to get a bargain. I have no such qualms.
There have been few moments in my life when I’ve had an abundance of cash, but I’ve experienced the same thing every time: there is no shortage of people here on this planet who excel at separating you from that cash before you can even blink an eye. They aren’t necessarily crooks or con artists. But they do know that your cash will look a lot better in their wallet than in yours, and they’re exceptionally good at making that happen if you let them.
