Understanding Interior Designer Markups: A Complete Guide
You're thinking about hiring an interior designer, you're excited about the process, and then you hear about markups.
Suddenly you're thinking: "Why am I paying extra for something they're just ordering?"
It's a fair question, and one of the most misunderstood parts of working with a designer. If you're not familiar with how the design industry works, the markup model can feel confusing or even off-putting. So let’s explain why it's not the sneaky up-charge it might seem like at first glance.
What Is a Markup?
Cost-plus, or markup pricing, is when an interior designer quotes their trade cost and then adds a percentage (typically 20% to 35%) to that cost when billing you. For example, if a designer purchases a chair at their trade price of $1,000 and applies a 30% markup, you would pay $1,300. This markup compensates the designer for their time spent sourcing, researching, ordering, tracking, inspecting, and coordinating delivery of that product, as well as the liability they assume by purchasing under their business account. Simply put: trade pricing is the benefit designers get from manufacturers for consistent orders and repeat business.
Some designers show you exactly what they pay and what they're marking it up to. This is transparent, but some clients find it awkward to see the designer's margin so explicitly. It can create uncomfortable dynamics around negotiating.
What is Retail Pricing (Or MSRP)?
In this model, the designer quotes you the manufacturer's suggested retail price (MSRP), and you simply pay that amount without seeing the breakdown of what the designer paid versus what they're charging. Many clients prefer this approach because it feels straightforward and less transactional. There's no awkwardness around seeing the designer's profit margin, and you can easily compare the price to what you'd pay if you walked into a showroom yourself.
The designer quotes you retail prices (or their price after markup) without showing their cost. You're not seeing the behind-the-scenes numbers. It's similar to most retail businesses operate: they buy wholesale and sell at a higher price to cover their overhead, expertise, and service. When you buy a car, you don't see the dealer's wholesale cost or know their exact margin. You just pay the listed price.
Designers Are Their Own Businesses
When a designer charges a markup on a sofa, you're not paying extra for the sofa itself. The sofa costs what it costs, and they they charge you the retail price. The typical homeowner does not have the high purchasing power and consistent order volume to get that business pricing on their own. If you were to open up your own design business, started traveling to factories to meet the makers, and placed consistent annual high volume orders (think $100k+) with different companies, they would extend this industry perk to you as well.
Trade pricing is a professional benefit earned through business relationships and industry participation. It's not something manufacturers extend to designers just for existing. They are afforded trade pricing for being a reliable, high-volume customer who actively invests in the industry.
Designers spend multiple thousands of dollars at their own expense traveling to trade shows and market weeks in places like High Point, New York, and Milan to name a few. They invest countless hours researching new manufacturers, vetting product quality, and staying current on new releases and industry standards. They maintain ongoing relationships with vendors and often commit to minimum order volumes to qualify for preferred pricing. All of this happens outside of billable project work and is part of running a design business.
They take on liability for the product from the moment an order is placed with a vendor until it is delivered to your home. These financial risks are significant, especially on large projects with dozens of orders and six-figure product budgets. If a piece arrives damaged and the manufacturer won't replace it, the designer often absorbs that cost to maintain the client relationship and their professional reputation. If payment issues arise, it's the designer's business credit and vendor relationships at stake, not yours. The markup isn't just compensation for time and expertise. It's also a buffer against the very real financial exposure designers take on when they put their business credit and vendor relationships on the line for your project.
You Already Pay Markups Everyday
This is the same model large corporations and big box stores use before you see a products for sale on their website or in store. Here's an analogy that might help. When you shop at HomeGoods or Target, you pay the price on the tag. That price includes a significant markup over what the store paid wholesale, often two to four times their cost. This markup covers their overhead, staff, logistics, and profit. You don't see their wholesale cost. You just pay retail price for the product you want and their back-end logistics. Now, here's the interesting part. Large retailers negotiate far steeper discounts than individual designers ever could. They're placing orders worth tens of millions of dollars, which gives them enormous leverage. Their per-item cost is often much lower than what a designer can access.
Designers operate the same way. They handle sourcing, quality control, ordering, and tracking. In fact, they go above and beyond the typical retailer by receiving, inspecting, coordinating delivery, and managing installation. All of that backend work has value so when you purchase through a designer, you're paying for the product and getting all those services. You’re getting better service and often better pricing while working with someone who genuinely cares about the outcome: your home.
So when you buy from a big retailer, they're keeping a substantial markup you never see. When you buy through your designer, you're paying comparable or sometime better pricing than retail, getting personalized service, and you're supporting a small business rather than a corporation.
That's why the trade pricing model makes sense. It allows designers to run sustainable businesses while providing clients with competitive pricing and exceptional service. You're paying the same price you would pay if you purchased it yourself, except the product has been pre-vetted for quality and expertly coordinated for your home.
What You're Really Paying For
Here is a breakdown of what actually happens when a designer sources a piece of furniture for you.
Research and Selection By the time they present you with three sofa options, they've already eliminated fifty that weren't right based on your criteria and the years of their own time spent researching products.
Vendor Relationships and Trade Access Designers spend years building relationships with vendors, manufacturers, and showrooms. They get better pricing, priority service, and the ability to negotiate or problem-solve when issues arise. Those relationships didn't happen overnight. They're the result of years of doing business, establishing trust, and proving themselves as reliable partners.
Ordering and Project Management They work with reps to ensure order accuracy, read specifications, manage customization details, coordinate lead times with your project schedule, and keep detailed records of every order. For a full project, a designer might place hundreds of orders across multiple vendors, all needing to be tracked and managed.
Quality Control and Logistics The designer coordinates deliveries, manages warehouse storage if needed, schedules installations, and ensures everything arrives when it's supposed to. They check for damages, manufacturing defects, incorrect item production, or quality issues. If something is incorrect, they handle the return, the replacement, and all the back-and-forth with the vendor. This coordination across multiple vendors, timelines, and trades is a logistical puzzle that takes real skill and time.
All of this work takes significant time, expertise, and effort. The markup compensates the designer for all these services, not just for clicking "add to cart."
Is the Markup Percentage Negotiable?
Sometimes, but not usually.
Designers set their markup based on what they need to earn to run a sustainable business. It covers overhead, insurance, software, their salaries, and some profit to keep the business afloat.
Asking a designer to reduce their markup is essentially asking them to take a pay cut. Some might be willing to negotiate on very large projects where the volume makes it worthwhile. But for most projects, the markup is what it is.
If the designer's pricing doesn't work for your budget, you have options: hire a different designer with lower fees, use a different service model (like hourly consultation where you handle purchasing), or reduce your project scope to fit the budget.
What's not productive is expecting a designer to provide full service but accept less compensation. That's not fair to them or sustainable for their business.
An alternative model is a flat design fee or hourly billing: You only pay the designer's fee for time spent designing and sourcing products. This works if you want full control over purchasing and are willing to do all the coordination yourself. But you lose the designer's trade discount and the convenience of having them manage everything.
What's a Fair Markup?
Markups typically range from 20% to 35% in the industry, though this varies by designer, location, and project type.
20-25% is often used by:
Newer designers building their business
Designers in less expensive markets
Projects with very high product volumes where lower margins still generate adequate revenue
25-30% is pretty standard for:
Experienced designers in most markets
Full-service projects with significant sourcing
Mid-range to high-end residential work
30-35%+ is typical for:
Very high-end designers with exceptional reputations
Markets with high costs of doing business (like major cities)
Projects requiring extensive customization or specialty sourcing
Designers offering white-glove concierge-level service
How This Compares to Other Industries
The markup model isn't unique to interior design. Many industries work similarly:
Contractors mark up materials they purchase for your project, often 10% to 30%. This fee is for handling logistics and covering the liability of taking on your product in their name.
Architects sometimes mark up contractor or vendor fees when they're managing those relationships.
Caterers mark up their food costs significantly to cover preparation, service, and expertise.
Event planners often work on commission from vendors or mark up services they coordinate.
Retailers mark up products from wholesale by 50% to 300%+ (yes, really).
Restaurants mark up food costs by 300% or more to cover overhead, labor, and expertise.
The idea of paying more than wholesale cost in exchange for expertise, convenience, and service is standard across most industries.
What About Kickbacks or Referral Fees?
This is separate from markups but worth addressing because it can feel murky.
Some vendors or contractors pay designers referral fees or commissions for bringing them business. This is different from the designer's markup on products. It's additional compensation from the vendor, not from you.
Is this ethical? Opinions vary in the industry and some designers disclose these arrangements. Others consider them part of their vendor relationships and don't discuss them with clients while some designers refuse them entirely to avoid any perception of conflict.
Our take: transparency is always better. Here at Nubuor Designs, we do not accept kickbacks or referral fees for recommending contractors or their subs. Any recommendation you receive from us is based on our genuine admiration of that company’s work.
The Bottom Line
If you're hiring a designer, a markup does not mean you’re being overcharged. When a designer receives trade pricing, it's because they've earned it through investments and commitments. Whether they pass those savings directly to clients or use it to offset their business expenses is a decision each designer makes. There's no industry requirement to share trade pricing, and most don't itemize it because it is their wholesale price and compensation for real value provided.
The question isn't whether you should pay it but whether the designer's overall fees represent good value for the quality of work and service they provide. And that's something only you can answer based on your budget, your designer, and how they make you feel about the process.
Still Have Questions?
At Nubuor Designs, we're always transparent and happy to explain our fee structure for your specific project.
Contact us to schedule a consultation and discuss your project.
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