Interior design is one of the least regulated industries. There’s no licensing body setting rates, no standard contract, no published schedule of what anything should cost. Two designers with similar experience in the same city can price the same project 40% apart and both be defensible.
That freedom is part of why we love this work. It’s also why pricing is the thing designers most often get wrong, and why we usually find out too late. Not when you quote the job, but months later when the numbers come in, and the margin isn’t there.
Most of that damage happens in one place: the gap between what a vendor quotes and what an item actually costs you.
Two prices, two decisions
Designers are really setting two prices, and confusing them is the first trap.
What you charge for your time depends on your skill, your experience, what your market bears, and how long the work honestly takes. Price above what you deliver and demand quietly dries up. If your phone never stops and you can’t keep up, that’s usually the market telling you you’re too cheap.
What you charge for product is a separate calculation, and it has an actual right answer, or at least a wrong one you can identify. Some designers sell at retail and don’t bill hourly on top. Others buy at wholesale and pass some of the savings to the client, which only works if you’re charging for your time separately, hourly or by the square foot. What doesn’t work is discounting product and under-billing time, which is the most common way a busy firm ends a profitable-looking year with nothing to show for it.
The rest of this is about the second price.
Why no single formula works
Trade discounts are based on volume, meaning how much you buy from a given vendor, and they run from around 5% to 70% off retail. Your tier moves as your purchasing changes, usually annually.
That means your discount is different at every vendor you work with, and different this year from last. Any designer who has tried to run one markup formula across their whole book has discovered the same thing. It’s accurate for two vendors, roughly right for a few more, and quietly wrong for the rest. The vendors where it’s wrong are the ones costing you money, and they’re not the ones you’d guess.
Pricing has to be worked out per vendor. There’s no shortcut around that, but there is a way to make it tractable.
The four numbers on every item
Whatever system you use, whether that’s software, a spreadsheet, or a legal pad, four numbers matter for every product you specify.
What the vendor quotes you. This might be their published MSRP, a MAP price, or a wholesale cost quoted directly. It typically excludes freight, since the shipping company bills you separately. Some vendors bundle a capped shipping fee into their number and many don’t. Always confirm what’s included, because this is the number everything else is calculated from, and a wrong assumption here propagates through all three of the others.
What the item actually costs you. Freight, receiving, storage, delivery, and the management time to get it through installation. This is the number designers most often underestimate, and underestimating it is the single most common cause of a project that felt profitable and wasn’t.
What you charge the client. Your real cost plus the markup in your contract, typically 15% to 25%. Because it’s contractual, it has to stay consistent across the job.
Retail. The highest price a member of the public would pay without a discount. Some vendors publish it, many don’t, in which case the highest price you can find online is a reasonable benchmark.
Three of these four are straightforward to look up. The second one, what the item actually costs you, is where the work is.
Working out what you actually pay
The most reliable way to think about this is as a multiplier. For every dollar of the vendor’s number, what do I end up paying? Work that out once per vendor and you can apply it to everything you buy from them.
A discount, freight included. A vendor gives you 40% off MSRP and covers shipping, receiving, storage and delivery. You pay 60 cents on the dollar, so your multiplier is 0.60. If your volume moves you to 47% off, it becomes 0.53. Straightforward, and increasingly rare.
A discount, overhead on you. Now that same vendor stops covering those services. Shipping, receiving, storage and delivery are yours, and you need to know what they actually cost rather than what you assume they cost. Most designers land somewhere between 8% and 35% depending on the vendor and the category.
You have two honest options. Bill overhead to the client separately, as its own line item monthly or at project close, and leave your product multiplier at 0.53. Or fold it in: at 47% off with overhead averaging 26% of what you pay the vendor, your real multiplier is 0.53 × 1.26 = 0.67.
What you can’t do is neither, which is what happens by default, when overhead is assumed rather than measured and quietly comes out of the margin.
One caution. Be consistent about what your overhead percentage is a percentage of. Overhead as 26% of what you pay the vendor and overhead as 26% of MSRP are different numbers, and mixing the two conventions between vendors is a quiet way to lose money on the ones where you got it wrong.
A small discount and punishing shipping. You buy accessories from a mail-order company offering 15% off, whose shipping runs 35%. Then you receive the item, store it for four months, and deliver it. Call that another 10%.
Multiply the chain: 0.85 × 1.45 = 1.23.
Your multiplier is above 1. You’re paying 23% more than the number on the vendor’s website, on an item your client can price on their phone in six seconds. This category is where designers most reliably lose money, and it happens because a 15% trade discount feels like a discount. It isn’t one. Once you can see the multiplier, you can decide honestly whether to mark it up properly, bill the overhead separately, or stop buying from that vendor.
Listed wholesale. If a vendor publishes wholesale pricing, your multiplier is just your overhead. 26% overhead means 1.26.
Markup is not margin
This one costs designers real money, and it’s worth being precise about.
Your client price is your cost plus the markup in your contract. The multiplier is simply 1 + your markup. A 15% markup is 1.15, an 18% markup is 1.18, 20% is 1.20, 25% is 1.25.
That looks obvious written down, and it’s still the most common arithmetic error in the industry, usually in the direction of a multiplier below 1, which sells the item for less than it cost.
The subtler trap is confusing markup with margin. An item that costs you $1,740 and sells at a 25% markup goes to the client at $2,175. Your profit is $435. But $435 is 25% of your cost and only 20% of your revenue. That’s a 25% markup and a 20% margin. Designers who quote themselves a “25% margin” and apply a 25% markup are running five points thinner than they think, on every item, all year.
Nobody teaches this. Most of us worked it out the expensive way.
What retail is actually for
Retail rarely tells the client what they’d pay. Shipping is usually invisible until checkout and can add 25% to 50% or more, and mail-order vendors who offer designers 15% to 20% can cost more all-in than a full-service vendor at 40% off.
Which makes retail most useful not as a number you charge, but as a comparison you show. If the retail figure on your schedule reflects the true landed cost, including shipping, receiving, storage and delivery, then it tells your client something accurate. This is what this would have cost you to do yourself. That’s a far better argument for your value than a number that quietly omits half the cost, and it’s the honest answer when a client pulls up a website and asks why your price is higher.
When the math isn’t the answer
Not every item follows its vendor’s usual structure. A negotiated one-off, a custom fabrication, an antique, a piece where the vendor priced the quote by hand. Sometimes the formula produces a number that’s simply wrong for that item.
The right response is to override it, deliberately, and note why. A pricing system’s job is to be right about the ninety items that follow a pattern, so you have the attention left over for the ten that don’t. A designer who overrides nothing probably isn’t looking closely enough. A designer who overrides everything doesn’t have a system.
The part that actually gets easier
Working out your true multiplier for each vendor takes an afternoon and some honest record-keeping about what your overhead really costs. There’s no way around that, and any tool promising otherwise is selling you a wrong number faster.
But it’s an afternoon per vendor, once, rather than a calculation per item, forever. After that the question stops being what do I charge for this and goes back to being is this the right piece for this room, which is the question we all got into this for.
Four Stripes was built around this. Pricing is set per vendor, so once you’ve worked out your real numbers with each one, every item you specify from them prices itself: what you pay, what the client pays, and what it would cost at retail, with your margin visible as you go.
Key takeaways
- Interior design pricing is complicated because vendor discounts differ, overhead is easy to underestimate, and there’s no industry standard to fall back on
- Your discount is different at every vendor and changes yearly, so one markup formula across your whole book will be quietly wrong for most of them
- Think in multipliers. For every dollar of the vendor’s number, what do you actually pay?
- A 15% trade discount with 35% shipping means you’re paying more than retail, and that category is where designers most reliably lose money
- Markup is not margin. A 25% markup is a 20% margin, and confusing them costs you five points on every item
