Imagine you’ve ordered £80,000 worth of furniture for a client. The client has paid you. You’ve paid the manufacturer. Everything is progressing nicely.
Then the manufacturer goes into administration. The furniture hasn’t been delivered. The money has gone. And your client quite reasonably wants to know what’s happening. Now what?
Are you responsible for refunding £80,000? Can your client pursue the manufacturer directly? Who owns any goods that have already been made? And where does your design studio sit in the queue of creditors? More importantly, do you know the answers before something like this happens?
Because I suspect many interior design studio founders don’t.
The problem starts long before a supplier goes bust:
I speak to design studio founders every day, and there’s a conversation I have far more often than I’d like. They’ve secured a substantial project. Perhaps an entire house. It’s exactly the sort of commission they’ve been hoping for. But when we look at the numbers, they’ve underpriced the design. They know they have, too.
They’ve justified it because there’s a lot of FF&E to procure. There will be beautiful photographs at the end. It’s a fantastic portfolio opportunity. And, particularly in a difficult economy, they need the work. I understand every one of those justifications.
I’ve run my own design studio for fourteen years. I know the temptation to look at the bigger picture. But the bigger picture still needs to add up.
What I see repeatedly is studios relying on procurement margin to compensate for design fees that don’t adequately cover the cost of delivering the design. And then, unbelievably, they’re underpricing the procurement service as well.
We’ve become uncomfortable charging for procurement:
Somewhere along the way, the interiors industry created an expectation that clients should benefit from trade pricing. The question of discounts has become so familiar that designers seem almost apologetic about the margin they retain. I’ve seen studios passing substantial third-party purchases through their businesses at margins of 10 or 15 per cent.
Now, whether any particular margin is sufficient depends on the cost of delivering the service and the commercial responsibilities involved. But what concerns me is how often nobody has actually calculated those costs.
Because procurement involves much more than choosing something beautiful and pressing a button. There’s checking availability, coordinating suppliers, reviewing samples, managing manufacturing schedules, tracking shipments, arranging storage, organising deliveries and overseeing installation.
And that’s when everything goes according to plan. When something is discontinued, you may need to reconsider several other specifications because everything was selected to work together.
When an item arrives damaged, someone has to deal with the supplier, the logistics company and the client. When a delivery is delayed, someone has to work out what that means for the installation schedule.
And when a client changes their mind, someone has to establish whether the order can be amended, cancelled or returned. It takes time. It consumes resources. And when something goes badly wrong, it can be very stressful.
Yet many studios struggle to explain this value to their clients. A client sees a sofa online, perhaps at a lower price, and asks why they shouldn’t simply order it themselves.
And rather than confidently explaining the procurement service, the designer feels pressured to reduce their margin. We need to get much better at articulating what we’re actually doing.
At Usher and Co, we operate an all-or-nothing approach to procurement. We don’t procure selected pieces while clients independently purchase the remainder. There are too many interdependencies between specifications, suppliers, lead times, storage, deliveries and installation for that arrangement to work effectively within our service model.
Other studios will have different approaches. But whichever model you choose, you need to understand what it costs to deliver and price it accordingly.
And then there’s the risk nobody has priced:
Now imagine that the studio is purchasing all those goods as principal. Depending on the contracts and circumstances, it may be responsible to the client for problems with goods it has supplied, even when the original failure lies with an independent manufacturer.
That could mean dealing with a refund or replacement obligation while trying to recover money from a supplier that has gone into administration. Suddenly, that attractive procurement margin looks much less attractive.
And when you’ve already underpriced the design fee, the financial consequences can compound very quickly. I’m surprised by how many founders have never properly considered whether they’re purchasing as principal or acting as buying agent.
They’ve always done things a certain way. They issue purchase orders, receive invoices, take payment from clients and retain a margin.
Everything has worked so far, so they assume their arrangements are fine. But having never encountered a serious problem is a fairly poor way of establishing whether your business is protected.
I’ve had those toe-curling moments:
At Usher and Co, we’ve experienced suppliers entering administration. Fortunately, we’ve never encountered a situation so serious that we couldn’t find a way through. But I can tell you that, in the moment, it can feel overwhelming. You’ve invested months, sometimes years, in a project. You’ve developed relationships with your clients and your suppliers. You’ve put a huge amount of work into bringing everything together.
Then something happens that is largely outside your control, and you’re left trying to find a way forward. Sometimes I have to remind myself that we’re dealing with stuff. Beautiful stuff. Expensive stuff. Stuff people have invested substantial sums of money in. But stuff.
Nobody’s life is at stake. We’re not saving lives here. Yet the stress that studio founders can carry when something goes wrong can be completely disproportionate. Even where we’ve established an agency relationship with our clients, we don’t simply shrug our shoulders when a supplier fails. Of course we help.
We might spend days negotiating, chasing goods, speaking to administrators or exploring alternative manufacturers. We might arrange a temporary solution so the client can use their home.
Sometimes we might choose to contribute towards an alternative, accept a reduced margin or absorb additional work because we want to help the client achieve a satisfactory outcome. Every one of those decisions carries a cost.
Sometimes it’s obvious. Sometimes it’s hidden in the hours your team spends dealing with a problem instead of doing other work. And sometimes it’s the emotional cost of trying to hold everything together.
Understand whether you’re principal or agent:
If I were advising a studio founder who had never examined their procurement arrangements, this is where I’d start. Understand the distinction between acting as principal and acting as buying agent. Then establish which role you’re actually undertaking when you place an order.
At Usher and Co, we operate a buying agency model. We make purchases on our clients’ behalf, following their approval of the products and associated costs. Our clients are identified in our purchasing arrangements as principals whose identities are not ordinarily disclosed to suppliers.
That confidentiality is important to us. We don’t consider it necessary to provide every supplier with a client’s personal details simply because we’re purchasing something for their home. But confidentiality doesn’t mean ambiguity.
The client needs to understand the arrangement. The supplier needs to understand the capacity in which we’re acting. And the purchasing documents need to reflect what has actually been agreed. English law recognises the concept of an undisclosed principal.
In MSH Ltd v HCS Ltd [2025] EWHC 815 (Comm), the High Court upheld the ability of an undisclosed principal to enforce a contract made through an agent who had the necessary authority and intended to act on the principal’s behalf. The case is a useful reminder that the identity of the ultimate purchaser does not always need to appear on the face of a supplier contract for an agency relationship to exist.
But don’t take that to mean that writing buying agent on a purchase order makes every potential liability disappear. An agent may also have contractual liability, and the actual position depends on the authority given, the contractual terms, the intentions of the parties and the circumstances of the transaction.
This is precisely why your paperwork and your working practices need to be examined together. And remember, you might act as agent for one purchase and principal for another within the same project.
Perhaps you’re purchasing through an online retailer whose terms don’t accommodate your usual agency arrangements.
Perhaps you’re selling an item that your studio already owns.
The important thing is understanding which role you’re undertaking in each transaction, rather than assuming every purchase is treated identically.
Bespoke furniture deserves particular attention:
If you’re commissioning bespoke furniture, establish the responsibilities of everyone involved. At Usher and Co, we may develop the creative concept, determine the proportions, specify materials and finishes and coordinate the commission.
But the specialist manufacturer is responsible for advising on technical construction, suitability and performance within the agreed arrangements. Those responsibilities need to be understood and documented. You should also know what happens to the goods and the client’s money at each stage.
If a substantial deposit has been paid, who owns the materials or partly completed furniture? When does title pass? Who is responsible for insurance while goods are in manufacture, transit or storage?
And if the supplier becomes insolvent, who has the contractual claim and what rights, if any, exist over the goods? These aren’t particularly exciting questions when you’re developing a beautiful bespoke sofa. They’re much more interesting when the manufacturer has gone bust halfway through making it.
Don’t put every egg in one supplier’s basket:
Supplier relationships matter. I place a lot of value on working with manufacturers whose craftsmanship I know, whose word I trust and whose businesses I’ve dealt with over many years. Those relationships don’t guarantee financial security.
But familiarity can give you useful insight. You may notice changes in communication, unusual payment requests or shifts in how a supplier normally operates. None of those things automatically indicates financial difficulty, but they might prompt you to ask a few more questions.
For significant commitments, consider proportionate due diligence, including credit checks and discussions about payment terms. And think about concentration of risk. If you’re commissioning a substantial amount of bespoke furniture, does every piece need to come from the same manufacturer?
There may be perfectly sensible reasons to consolidate orders. But placing a large proportion of your client’s investment with one supplier means that one business failure could affect a large part of the project. Spreading orders across suitable manufacturers may reduce that exposure. You cannot eliminate every risk, but you can make informed decisions about which risks you’re prepared to accept.
Have the difficult conversation before you need it:
This is one of the most important lessons I’ve learnt. It’s much easier to explain how procurement works before a client has committed significant money than it is after something has gone wrong. Be clear about your role. Explain who is supplying the goods, how payments are handled, what responsibilities the studio is accepting and what happens if a manufacturer fails.
And make sure those explanations are reflected in your contractual arrangements. Don’t assume your client understands simply because the terms were attached to an email six months ago. At Usher and Co, we discuss our agency model before a project begins and revisit it during procurement.
We want clients to understand that we’re purchasing under their instruction, on their behalf, rather than operating as a conventional furniture retailer. That doesn’t diminish our commitment to helping them if problems arise. It establishes a shared understanding of the commercial relationship.
What would your CFO tell you?
When something does go wrong, I encourage founders to imagine an independent CFO walking into their studio. Someone who has no emotional attachment to the client, the supplier or the project. They can see the contracts, the finances and the available options.
What would they advise?
Would they tell you to spend another £20,000 of the studio’s money to make the problem disappear?
Would they tell you to absorb weeks of additional work without considering the cost?
Or would they tell you to establish your obligations, assess the options and make a decision that protects the business while treating the client fairly?
Because when you’re emotionally invested, it’s very easy to make decisions based on how desperately you want to put things right. I’ve felt that pressure myself. But as a founder, you have responsibilities beyond the client whose project is currently causing concern.
You have employees, other clients, suppliers and the financial future of the studio to consider. Of course you should do everything reasonably possible to help your client. But you need to understand where your obligations lie and what additional commitments you’re choosing to make.
And sometimes, you need to disentangle the emotional decision from the commercial one.
Before you place another substantial order:
If you’ve never examined your procurement model, I would encourage you to do it. Understand whether you’re acting as principal or agent. Review the terms under which you purchase and sell goods. Consider what happens to deposits, ownership and insurance if a supplier fails.
Look at the actual cost of delivering procurement, including the time spent when things go wrong. And ask yourself whether the margin you’re retaining genuinely reflects the work and the exposure involved. Because a substantial FF&E budget can make a project look commercially attractive.
But the value of the orders passing through your studio tells you very little about what you’re actually earning from them. You might be making a perfectly sensible commercial decision to accept a particular risk.
Or you might be carrying hundreds of thousands of pounds of exposure without ever having stopped to think about it. I’d want to know which.
And I’d want to know before the supplier went bust.
For readers who want to explore the legal distinction, the two most relevant authorities are MSH Ltd v HCS Ltd [2025] EWHC 815 (Comm), explained by Hill Dickinson and Berge Bulk Shipping v Taumata Plantations [2025] EWCA Civ 876.
