Understanding FF&E Procurement: Should Interior Designers Purchase as Agent or Principal?

What is FF&E Procurement and Why Does It Matter?

In the world of interior design, FF&E procurement - short for Furniture, Fixtures and Equipment - is both a logistical challenge and a financial opportunity. While much attention is placed on selecting and specifying beautiful items, the process does not end there. Designers must also manage the purchase, delivery, installation, assembly, styling and waste removal for what can easily total hundreds or even thousands of pieces.

This multifaceted process is referred to as "FF&E procurement". Beyond aesthetic considerations, it demands rigorous coordination with suppliers, manufacturers and logistics teams, and entails significant exposure to both financial and operational risk. As such, understanding the legal framework within which these items are purchased is crucial - particularly whether a designer is acting as an agent or as a principal.

What Is the Difference Between Purchasing FF&E as Agent and as Principal?

The distinction lies in who holds the contractual relationship with the supplier and who bears responsibility to the client. When a designer acts as a principal, they themselves buy and then resell the FF&E to the client. When acting as an agent, the designer facilitates the transaction on behalf of the client, but the client is the purchaser.

Each approach carries distinct legal, financial and operational consequences, particularly in terms of liability, ownership of discounts, and the handling of client funds.

Purchasing FF&E as Principal: Commercial Opportunity or Compliance Risk?

When an interior designer purchases FF&E as a principal, they are effectively operating as a reseller. The designer buys items, often at a trade discount, and resells them to the client at a marked-up price. This margin represents the designer's profit.

Because the designer is the legal purchaser, they own the goods until resold to the client. Any warranties or liabilities rest with them, and the contractual relationship with suppliers is theirs alone. In this arrangement:

• Discounts: All trade discounts are retained by the designer, who sets the resale price independently.
• Client Money: Funds paid by the client become the designer's money upon receipt; there is no obligation to hold it separately.
• Interest: Any interest earned on client advances belongs to the designer.
• Liability: The designer assumes all responsibility for defects or damage. If a product fails, the client’s recourse is against the designer.
• Breakages: Damage or loss in transit is also the designer’s responsibility.

While this model allows greater commercial upside and flexibility, it also carries material risk. Designers must be willing to absorb the costs of any disputes, replacements or delays. This approach is often best suited to low-risk, high-margin items where financial exposure is minimal.

Purchasing FF&E as Agent: A Protective but Constrained Role

In contrast, when acting as an agent, the designer facilitates the purchase on behalf of the client. Here, the supplier sells directly to the client; the designer’s role is to identify, order, and manage the logistics. The designer earns a procurement fee, usually calculated as a percentage of the trade price, but does not profit from mark-up.

This model limits the designer’s liability but also curtails their ability to profit from trade discounts. Notably:

• Discounts: All trade discounts belong to the client, who is the purchaser.
• Client Money: Funds must be held in a separate client account and used solely for the client’s purchases.
• Interest: Any interest accrued on these funds is owed to the client.
• Liability: The supplier or manufacturer is liable for defects; the designer may assist with resolution, but bears no direct contractual responsibility.
• Breakages: Transit risks sit with the supplier or shipper.

Although this structure offers greater legal protection, it introduces complexity in managing client funds. Designers must establish and maintain separate client accounts, often requiring compliance with stringent financial regulations. For many, this is an administrative burden they are neither prepared nor qualified to manage in-house.

Trade Discounts: Who Owns the Benefit?

Perhaps the most contentious issue in FF&E procurement is the treatment of trade discounts. Designers often enjoy substantial discounts from suppliers—earned through volume, industry status or long-standing relationships. Whether these are passed to the client or retained as profit depends on whether the designer is acting as agent or principal.

As principal, the designer may keep the discount and resell at market rate. As agent, however, the entire benefit of the discount belongs to the client; charging a procurement fee on the undiscounted price would be improper and may constitute a breach of the Bribery Act 2010 as representing secret commissions.

Failing to understand or disclose this distinction can expose designers to reputational and legal risk. Clients (particularly those who are legally advised) will expect transparency and correct treatment of discounts, and may seek restitution if these principles are breached.

Managing Client Funds: Why Compliance Is Crucial

One of the most serious obligations in agency procurement is the treatment of client money. Funds must be held in designated client accounts, not commingled with business revenue. This is not simply good practice - it is a legal necessity under most professional and financial regulations.

Unfortunately, many designers are unaware of these obligations, or underestimate the complexity of compliance. Managing multiple client accounts, calculating procurement fees, and reconciling transactions is a specialised function.

To address this, solutions such as dospay’s FF&E Procurement Accounts offer a compliant and transparent way to manage client money. These third-party managed accounts provide clear segregation of funds, audit trails, and interest calculations—allowing designers to focus on creative work while ensuring regulatory compliance.

Which Model Should Interior Designers Choose?

There is no one-size-fits-all answer. Designers undertaking high-margin, low-risk work may benefit from operating as principal; the profit potential is higher, and the process more streamlined. However, the risks (particularly around defects, disputes, and financial transparency) can be significant.

Designers working on complex or bespoke projects, or serving clients with high legal or fiduciary standards, may find the agent model safer and more appropriate. Though it limits margin potential, it aligns legal responsibility with the actual supplier and offers clearer client protections.

In either case, what matters most is clarity, transparency, and compliance. Designers must be honest with clients about the model they are using, document the arrangement properly, and ensure that any financial arrangements - particularly around trade discounts and client money—are handled in accordance with best practice.

Conclusion: FF&E Procurement is More Than Just Logistics

FF&E procurement is a vital, valuable part of an interior designer’s role. But it is also one fraught with legal, financial and reputational risk if mishandled. Understanding whether you are acting as agent or principal is essential - not just for accurate pricing, but for regulatory compliance and client trust.

Designers who treat procurement seriously, operate transparently, and partner with credible financial platforms will not only protect themselves—they will also enhance their professional reputation.