Who wins in the end?
Who wins in the end?
There has been a lot of talk lately about venues and wedding suppliers demanding kickbacks or commissions to be on recommended suppliers list - or suppliers offering incentives, gifts or payments for recommendations made to them. Now whilst this is nothing new to many industries it is reasonably new (slowly creeping in mainly within the past 4-5 years) to the wedding industry. I’m not sure about you but for the 20 years that I have been in the wedding industry I have always considered it to be an honest, elegant, classy, above-the-grubbiness industry where those who chose this industry as their career did so to not only make a living but to deliver the best service they can to help a couple have the best day possible, without compromising on integrity. I always saw wedding suppliers and venues as leaders in the community who could be trusted and relied on to give honest advice and exceptional delivery of their service and products for what is essentially not only one of the most important days of a couples life, but also one of the most expensive ones. They rely on our integrity, honesty, experience, knowledge, skill, and often friendship to do right by them as they see these traits as being equally as important as the price they are paying for each product or service. So why do we feel the need to have to muddy the waters by essentially undermining our own integrity and ethics and essentially bribe people to refer us? Yes, it is nothing short of a bribe. Should we not be receiving referrals because of our reputation of hard work, longevity in the industry, standard of service delivery, the quality of our goods as well as as a history of generally doing the right thing within the industry and to brides and grooms? Does this change now mean that these things matter less nowadays? Are we really that money hungry that we would push these other traits aside to make a quick buck in addition to our going rate? And on that note, where does all this stand legally? You know, with the ATO? I know there are many legitimate businesses that have a business structure based on referrals and commissions, such as wedding planners or wedding booking sites that have transparency in how they operate, but those who receive the $200 cash payment from a photographer, or the $50 gift voucher for a day spa from a makeup artist, or the movie vouchers or grocery gift cards that a celebrant demands as their chosen form of currency, are these all declared as income? And who pays for this in the end? Well we know the answer to that!
Yes, you may say that many industries have or had this sort of arrangement but let’s look at a couple: The travel industry started many, many years ago with under the counter kickbacks and commissions, but then developed a commission structure that became more transparent and accepted across the board to the point that the majority of companies have industry set commissions in place . The medical industry - yes for years doctors were known to receive junkets, money and gifts from various companies that encouraged and rewarded them for recommending their products or services until the Medical Board of Australia stepped in and implemented a strict Code of Conduct which, amongst other things, required doctors to disclose to patients any financial interest they have in products or services they are recommending. The building industry - as part of a new building contract builders are required to disclose their mark-up percentage on external suppliers they use so that the owners are fully informed of their financial commitment. Why was all this formalised? To ensure their industries remained transparent and seen as ethical as they were rapidly losing credibility with the public and their customers.
Weddings however have one distinctive difference….they are hierarchial. Meaning that there is a general order of suppliers who are booked first, due to the planning and logistics of the wedding, with other suppliers being booked further down the track. This then can create an unfair playing field across all sectors of the wedding industry: venues, normally the largest ticket item of a wedding are traditionally booked first as that then sets the date. Then, unless the couple are having a wedding planner, the next thing on the list is a marriage celebrant, as there won’t be a wedding without them. From there the couple will normally start looking at photographers, dresses, cakes, florists, suits, decorators, stationery, and work their way down the list to DJ’s/MC’s, make-up and hair, car hire, etc. This can then establish an almost pyramid setup whereby the venue/supplier at the top can wield the power to direct brides and grooms wherever they like, and possibly even hold hostage those suppliers below who rely on recommendations and don’t want to, or can’t afford to, pay. Is this fair? Who wins in the end? Of course not all venues or suppliers who are booked first do this, of course many, or I'd like to think most, don't, but how do the bride and groom know? Well keep reading.
So where does it end? If everyone in the industry, in all fields, does this will we end up creating an industry that prices itself out of its own market? Will we see an increase in DIY weddings to avoid this ‘wedding tax’ as it is already being nicknamed. Is it not better for all concerned, brides and grooms as well as suppliers alike to avoid practices like this to give each business the best chance to survive? Isn’t honest healthy competition competing on our own merits better than competing on who can pay the most for a referral? At the end of the day these extra costs have to come from somewhere. Either businesses absorb the costs and eventually go broke or they reduce their products or services to compete on price, or they pass on the cost to the bride and groom in way of increased prices. Multiply this process by the number of different suppliers that a couple will book for their wedding day and you can see where I’m headed with this. Who wins in the end? Definitely not the bride and groom.
So where to from here? It’s not up to me or the next person to tell anyone how to run their business; it is not illegal to provide kickbacks or commissions (although it may be to not declare them as income) however is this really the best business practice for the wedding industry? Is it possible to stop this before it becomes the norm throughout the entire wedding industry? Surely if each individual business was to make the decision not to venture down this path or refuse demands of payment for referrals, that we could nip this in the bud before it goes any further? I’d like to think so. Yeah, sure, we are only small fries in a big industry but small steps can lead to a big change. So how do we get the word out that we are doing the right thing by our brides and grooms? How can we promote our point of difference without blatantly pointing out that others (possibly our opposition) are paying for their recommendations, which then makes us look bad? By joining Ethical Wedding Professionals.
Ethical Wedding Professionals was established for this, amongst other reasons. It is a not-for-profit FREE membership for venues and wedding suppliers to publicly and legally declare that they operate their business in an ethical manner in keeping with the EWP Code Of Ethics. Amongst the list of Code Of Ethics is the requirement to ‘disclose any financial interest or payment (extending to and including monetary payment, exchange of service of value), referral or recommendation of services, products or venues, as well as having no expectation or demand of payment for referrals or recommendations including commissions, gifts or kickbacks’. By promoting what we don’t do makes brides and grooms aware of what is happening in the wedding industry and just might get them asking the question. Am I being referred wedding suppliers because they are the best available...or because the venue/supplier is making money on it? Picture this change and then ask yourself again: who wins in the end? Yes, everyone! www.ethicalweddingprofessionals.com
Written by Lisa Thomas - one of the founding members of Ethical Wedding Professionals