Freight costs are rising. Storage fees have not gone anywhere. And somewhere between the purchase order and the install day, someone is paying for the hours it takes to coordinate, track, receive, inspect, and move every piece that enters a project. The question is whether that someone is you, or your business.
This is one of those operational decisions that looks like a bookkeeping question until it is not. Whether you mark up freight and storage, pass them through at cost, or roll those costs into a logistics fee is not just about how your invoice looks. It is about whether your firm is recovering the real cost of doing business.
Interior Design Community put this question to its community: Is it industry standard to mark up freight and storage costs, and to charge for procurement time? The answers ranged from 10% processing fees to 25% flat rates to no markup at all, with the reasoning tied directly to each designer’s business model.
Where the Freight Question Really Comes From
If you have been in practice for more than a few years, you have had the experience of watching a freight line item balloon past anything you expected. Fuel surcharges. Residential delivery add-ons. White glove fees. Receiving and storage at the warehouse. And then, if something arrives damaged, the time and energy to manage the claim, coordinate the replacement, and keep the client informed.
None of that time is free.
The community question was framed around what is “industry standard,” which is understandable. When you are building or adjusting your fee structure, it helps to know what your peers are doing. But the more useful question is what is standard for your business model, because the answer is not universal.
For a closer look at how that framework plays out in practice, including whether procurement deserves its own hourly rate and how markup fits alongside it, see Interior Design Procurement Fees: Hourly Rate vs Markup Explained.
Why Your Business Model Changes the Answer
The clearest takeaway from the community response was that the right approach to freight and storage depends on how you are already charging for procurement work.
@katerinabuscemi put the framework plainly:
“Technically it’s part of the ‘cost of goods sold’ and should be marked up with furniture. That said, I agree with what others are saying — it’s so expensive as it is and I don’t want to add to that. If you’re charging hourly to manage procurement, I don’t see why the shipping and receiving need an additional markup. If you operate on a low markup and/or you are not charging hourly for procurement then I think you should probably mark it up to cover yourself.”
@katerinabuscemi
This is the right framework. If you bill hourly for procurement and your rate reflects the full scope of coordination work, a markup on freight may feel redundant. To a client scrutinizing your invoice, it might look that way too. But if your margin on product is your primary revenue stream, or if you charge a flat design fee and do not bill hourly for back-office work, then letting freight pass through at cost means you are absorbing real labor for free.
Neither position is wrong. But you have to be honest about which situation you are actually in. A designer who charges 35% on product and bills hourly for procurement time is in a fundamentally different position than one who charges 15% on product and a flat design fee. The freight question does not have a universal answer, but it has a right answer for each business model.
The Two Paths: Markup or Logistics Fee
Charging a Flat Percentage on Freight and Shipping
Several designers in the thread described charging a flat percentage, anywhere from 10% to 25%, on freight, shipping, and related costs.
@tlmkates described her approach:
“Absolutely. 25%. It covers time coordination as well as any smaller adjustments in the freight cost, though I usually build a client for the difference.”
@tlmkates
The flat percentage approach is easy to apply consistently and straightforward to explain. It ensures that you are recovering at least some of the administrative overhead associated with each shipment, and it scales with the actual cost of the freight.
The limitation is predictability. Freight costs vary widely by vendor, delivery zone, piece size, and timing. A 15% markup on a $200 shipping charge is $30. A 15% markup on a $2,000 freight bill is $300. Whether those amounts accurately reflect the actual coordination time involved depends entirely on the specific project. For some designers, the percentage evens out over the course of a project. For others, it consistently over- or under-recovers.
The framing of the fee also matters. @christopherkennedyinc described it as “a 10% processing fee for hitting our books.” That language is worth considering. “Processing fee” names what the charge is actually for, which can feel more transparent to clients than a percentage markup presented without context.
How you frame that fee in conversation matters as much as how you calculate it. How to Confidently Answer “What Is Your Markup?” (Without Underselling) walks through how to talk clients through markup and procurement charges without sounding defensive about it.
Replacing Per-Item Markup with a Logistics Fee
A number of designers have moved away from marking up individual freight invoices and toward a single logistics or admin fee that covers all coordination work in aggregate.
@lizmacphailinteriors described how and why she made that shift:
“We charge a logistics fee to cover shipping/freight/receiving and storage. Once it is pulled for install that is billable at cost. I found that we were spending so much time to track all the freight/shipping/receiving costs to bill each item it was more efficient to do a fee on top of product cost. Our contract signing requires a signature but also for clients to initial key points. We’ve already explained this in our preliminary discussions and then they initial. Our contract stipulates that tariffs are billable.”
@lizmacphailinteriors
The logistics fee model simplifies billing significantly. Instead of tracking and marking up every freight invoice as a separate line item, you charge a defined fee that covers the work of managing all of it. Individual freight costs pass through at actual cost, which can feel more transparent to clients who pay close attention to line items.
The tradeoff is that you are committing to a fee before you know exactly how much logistics work the project will generate. On a straightforward project, the fee may be more than sufficient. On a project with multiple vendors, international orders, and complicated delivery schedules, it may fall short. Setting the fee at the right level, and being explicit in your contract about what is and is not included, is where the real design work of this decision happens.
@shannoncassellinteriors uses a structure that names a treatment for every category:
“We charge a flat rate of 18% for shipping on all items. Pass through costs for receiving services/storage/delivery. Procurement is hourly, which includes any time it takes to get everything from the proposal into its place. Bookkeeping is overhead.”
@shannoncassellinteriors
What is notable about this structure is that every category has a named treatment. Shipping is marked up 18%. Receiving and storage are billed at cost. Procurement time is hourly. Bookkeeping is absorbed as overhead. That level of clarity in your own thinking, even if clients do not see the full breakdown, makes it easier to answer questions when they arise and to examine whether each part of your model is actually working.
What Happens When Something Goes Wrong
One of the clearest arguments for charging at least something on freight came from @eckstromstudio, who named a scenario most designers have faced:
“We finally had to do it. How do we pay for the time it takes should a piece arrive damaged?”
@eckstromstudio
Freight claims are time-consuming. Documenting damage, coordinating with the vendor, managing the client’s expectations while waiting on a replacement, chasing down credits: none of that is design work, but all of it falls to someone in your firm. If you are passing freight through at cost with no markup and no logistics fee, that work is unpaid.
A freight markup or logistics fee creates a buffer for exactly these situations. It does not have to be framed as protection against problems. It can simply be described as the cost of professional procurement management, which is what it is. When you present it that way to clients, both before and after they sign, the charge becomes part of what they are buying: not just the product, but the professional oversight that gets it to their door and addresses problems when they arise.
The Software and Tax Problem Nobody Talks About
Even among designers who want to charge appropriately for freight, there is a practical obstacle: building it correctly into your project management or accounting software is not always simple.
@spearman_spaces raised this directly:
“How logistically do people do this using software? Freight is taxable but the mark-up isn’t, right? So it’s a nightmare to do this just from an execution perspective but please tell me! ❤️”
@spearman_spaces
This is a real issue that does not get enough attention in discussions about freight policy. Sales tax treatment of freight varies by state. In many states, freight is taxable when it is included in the price of a taxable sale but not when it is a separately stated charge. Your markup on freight may or may not be subject to sales tax depending on how it is structured and where you are operating. That is before you get to how your project management or accounting software handles the separation.
This is a question worth taking to your accountant or bookkeeper before you formalize your freight structure in your client contracts. Getting the tax treatment wrong, in either direction, creates problems that are difficult to unwind later. One comment in the thread also noted that tax itself should never be marked up, which is both good practice and, in most jurisdictions, a legal requirement.
Educational content, not legal advice.
If sales tax and procurement accounting feel like a soft spot in your practice, Bookkeeping Red Flags for Interior Designers, Lessons from the Design Community is a useful next read before you lock a freight policy into a contract.
The Right Freight Policy Starts Before the First Invoice
The designers who sounded most grounded in this thread were the ones who described having their freight and logistics approach written into their contracts, signed and initialed before a project begins.
@lizmacphailinteriors noted that her contract requires clients to initial key points, including the logistics fee structure, and that tariff costs are explicitly called out as billable. That specificity matters. When a client sees a freight line item on an invoice, your policy should not be something you are explaining for the first time. It should be something they already agreed to, in writing, before the first purchase order was placed.
If your current contract does not spell out how freight, storage, receiving, and delivery are handled, this community discussion is a useful prompt to close that gap. Whether you charge a markup, a logistics fee, or bill hourly for procurement, the mechanism matters less than the clarity. Clients who understand your structure before it shows up on an invoice are far easier to work with than clients who encounter costs they did not anticipate.
The range of approaches in this thread, from 0% pass-through to 25% markup to flat logistics fees, reflects the genuine variety in how interior design firms are structured and positioned in the market. There is no single right number. What the most effective designers share is not a specific percentage but a policy they have thought through, written into their contracts, and explained before the first order goes out.