Ask five interior designers what they charge for product, and you’ll likely get five different answers delivered with the same confidence: forty percent, fifty percent, “whatever the vendor allows.” Ask those same five designers whether that number is a markup or a margin, and the confidence often wavers.
That’s not a small mix-up. A 40 percent markup and a 40 percent margin describe two genuinely different financial outcomes, and a designer who treats them as the same thing can end up running a business that looks profitable on paper while feeling tight in the bank account every single month.
That confusion sat at the center of a recent question posed to Interior Design Community: what is everyone’s targeted gross profit margin, and what percentage are designers actually marking up product? The replies did more than answer the question. They revealed how differently working designers define profitability, and how often the number a person states out loud isn’t the number actually carrying their business.
Why Markup and Margin Keep Getting Confused, and What the Gap Costs You
Markup and margin sound like they should be interchangeable. They describe the same transaction from two different angles, and that’s exactly why they get tangled. Markup is the percentage you add to your cost to arrive at your sale price. Margin is the percentage of that final sale price that represents profit. Run the same starting numbers through each formula, and you get two very different results, and the gap is wider than most people expect.
A piece that costs you $1,000 and sells for $1,600 carries a 60 percent markup. But the profit on that sale, $600, is only 37.5 percent of the $1,600 you actually collected. That’s the margin. Run the same logic on a 100 percent markup, doubling your cost, and you land at a 50 percent margin, not 100 percent. The higher the markup climbs, the wider that gap grows, which means a designer who hears “I mark up 60 percent” and assumes that translates to a 60 percent profit is already working from the wrong number.
@artosaidc summed up the conversion plainly:
“55-60% markup is basically a 30-35% margin. That should be minimum. Aim for 40% margin. Hard to do without serious vendor discounts.”
@artosaidc
That’s the heart of it. If your real target is a 40 percent margin, a 60 percent markup won’t get you there on its own. You’d need closer to 65 or 70 percent markup to land in that range, and that kind of room rarely exists once trade pricing, freight, and vendor minimums are factored in. Before you can set a meaningful target, you have to know which of these two numbers you’re actually setting it for. The phrase “40 percent” means entirely different things depending on which side of the equation you’re standing on.
Why There’s No Universal Number, and Why Borrowing One Can Backfire
One of the more useful things to come out of the thread was how openly designers admitted that their numbers move depending on the project. There’s no single figure that applies cleanly across a portfolio that includes a small refresh, a full renovation, and everything in between.
@designsbyhuman put real numbers behind that variability:
“We’ve been averaging about 30% to 40% on smaller projects and 20% to 30% on the larger ones. But lots of variables in there!”
@designsbyhuman
That range isn’t a sign of inconsistency. It’s what happens when a designer prices according to the actual shape of a project rather than forcing every job through the same formula. Smaller projects often carry more relative overhead per dollar of product (more time spent per item, more touchpoints, less buying leverage), so they need a higher percentage to stay worthwhile. Larger projects can sometimes absorb a lower percentage because the volume itself produces enough total profit to make the math work.
The risk isn’t that your number falls within that range. The risk is borrowing someone else’s number wholesale and assuming it will behave the same way inside your business. A designer who mostly runs small residential refreshes and uses a benchmark built for whole-home renovations may end up structurally underpriced without ever understanding why the math feels off. The number itself was never wrong. It simply wasn’t built for the kind of work it’s being measured against.
Before you borrow anyone else’s benchmark, get clear on your own numbers first. Calculating your true cost of doing business tells you the floor your pricing needs to clear, regardless of the markup percentage you started from.
Build a Blended Target Instead of Chasing a Single Percentage
Once you accept that your number will move project to project, and even item to item, the more useful question becomes: what are you actually averaging toward across the whole job?
@lsi_workshop framed this as a project-wide calculation rather than a line-item one:
“You need about a 40% margin on the overall project to be profitable, but as @iveydesigngroup said, with some vendors that’s just not possible. But that 40% is on the project as a whole, so if you can’t do it in some places you can make it up in others.”
@lsi_workshop
That’s a genuinely useful decision rule, and it’s one a lot of designers don’t give themselves permission to use. If a client falls in love with a piece from a vendor whose pricing structure caps your markup at 25 percent, you don’t have to walk away from that piece, and you don’t have to quietly eat the difference either. You build the project plan with that constraint in mind from the start, and you balance it against categories where your margin runs higher: lighting, accessories, custom upholstery, window treatments, anywhere you have more pricing latitude.
This only works if you’re tracking your numbers by project rather than by individual line item, and reviewing them somewhere other than your head. A simple running tally, even a basic spreadsheet that totals cost against sale price as you build out a proposal, lets you see in real time whether the categories with more room are actually covering the categories with less. Without that view, “I’ll make it up elsewhere” remains a hope rather than a plan.
Marsha Sefcik’s episode on reverse-engineering your design income walks through exactly this kind of project-wide tracking, including how to catch margin leaks by category before they show up on a P&L.
When Your Fee, Not Your Markup, Is What Actually Protects Your Profit
Not every designer in the thread anchors profitability to product markup at all, and that split is worth paying attention to, because it points to two genuinely different ways of running a design business.
@chelseaevansinteriors described a model built around the design fee instead:
“My design fees cover my time, so I’m flexible on markup. I’d rather find the perfect piece for my client than rule something out because another piece can make me more money. I do have minimums though, to protect myself and make sure I don’t lose money on transaction fees, etc. I’d start with your transaction fees % and other built in costs, and then build a buffer you’re comfortable with as a minimum.”
@chelseaevansinteriors
This is a meaningfully different structure, and it isn’t a softer one. It simply moves the load-bearing wall. Instead of asking product markup to cover both the cost of sourcing and the value of your time and expertise, this model prices time properly through the design fee and treats markup as a secondary layer with a floor, not a target. That floor exists to cover real costs (transaction fees, restocking risk, the time spent processing an order) so that even a lower-margin piece doesn’t quietly cost you money to sell.
If this approach appeals to you, the work is in defining that floor honestly before you need it. Sit down with your actual transaction costs, your time per order, and the built-in expenses that rarely make it into pricing conversations, and set your minimum from there. A floor based on a feeling will move the first time a client pushes back. A floor based on your numbers won’t.
Why Two Designers Quoting the Same Percentage Might Be Running Very Different Businesses
Even when designers land on similar-sounding numbers, those numbers often don’t measure the same thing, and that mismatch is where much of the comparison-driven anxiety comes from.
@leighannelamarreinteriors raised the question that exposes it:
“When noting markup % is everyone marking up from true wholesale or designer wholesale? And then do you bill additionally for procurement, freight, receiving, etc?”
@leighannelamarreinteriors
That’s two questions doing the work of one, and both matter. First: what baseline are you marking up from? “True wholesale” and “designer net” pricing can sit at noticeably different starting points depending on the vendor and your account tier, so a 50 percent markup from one baseline can land in an entirely different place than the same percentage from another. Second: are procurement, freight, and receiving included in your markup, or billed as separate line items? A designer who separates those costs out can often run a lower product markup and still come out ahead of a designer who quietly absorbs all of it into a single number.
Before you compare your percentage to anyone else’s, answer both questions for your own business first. Know which wholesale tier you’re actually working from with your core vendors, and decide deliberately whether logistics and procurement sit inside or outside your markup. Two designers can both say “I mark up 55 percent” and be describing two completely different financial pictures. Make sure you know which picture is yours.
If you haven’t drawn that line yet for your own business, Interior Design Procurement Fees: Hourly Rate vs Markup Explained breaks down how to decide whether procurement time earns its own rate or rides inside your markup.
The Number That Matters Most Is the One You Actually Know
What this thread really exposed wasn’t a disagreement about the right percentage. It was a reminder that the percentage itself matters less than whether you can explain, with real numbers to back you up, exactly how you arrived at it.
@dwellwelldesignco made that point better than anyone else in the conversation:
“To be clear though, are we saying gross margin on goods sold or on the total project? To have comparable convos about pricing and margin it should be total project margin. Where you can’t get there on markup you should ensure your design fee can carry you. I have such a hard time with design fee convos- we should talk total project $ since the way you slice it doesn’t really matter- total profit does. I’ll get off my soapbox now 😂”
@dwellwelldesignco
That reframe is the one worth carrying forward. Stop measuring success item by item, and stop measuring it against a number someone else confidently stated in a comment thread. Look at the whole project: the design fee, the product margin, the ancillary charges, all of it together, and ask whether that total reflects what your time and expertise are genuinely worth.
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