One of the groups I'm a part of on LinkedIn, Event Planner Productivity Hacks, recently posted a great discussion question, "Is it unethical to take kick-backs or mark-ups?". This is a question that continues to fuel great debates within the event planning community.
My initial response was absolutely, without a doubt it is unethical. Then I thought about it, is it ALWAYS unethical? Does the answer depend on the type of event planning? Does the answer depend on geographical location/regions? Are there exceptions to the rule as to when mark-ups are widely accepted and expected?
In the wedding planning industry, there are times when a planner receives a commission for referrals if the client decides to book. This is the case for certain event venues, hotels, and even vacation resorts. This is very common and we in the industry do not frown on this practice. It is not unethical to receive the commission, what is unethical is to only recommend vendors that will give commission and to refuse to the viable non-commissionable vendor options.
Event planners may have a vendor relationship that offers discounted or wholesale pricing. If the event planner rents and/or purchases the equipment, the event planner has the right to create a suggested price that may include a markup. In my opinion, as long as the pricing is comparable to the average retail price for the same equipment, it is ethical to markup. What is unethical is to overcharge a customer who is unaware of the pricing.
Event planning trends and customs differ from city to city. In one US city, I worked with an amazing event company that provided an event venue sourcing service. It was a free service for me, the client. The chosen event venue paid a commission to the event company for finding them business once I booked my event. I thought this concept was genius. In this city, it was not uncommon. It is very uncommon in my home city. The event/meeting planning industry widely accepts and appreciates 3rd party sourcing for hotel sleeping room group bookings, but not for unique venues/meeting space.
All in all, my conclusion is that it is not unequivocally unethical to take kick-backs or mark-ups. It is unethical, however, to only focus on your company's opportunities to profit at your client's expense.