Interior Design Pricing: Mastering Transparency and Profitability in 2024

interior design pricing

As an interior designer, you’ve likely grappled with how to structure your pricing and whether to disclose your markup on products. In 2024, this debate has intensified as some designers are publicizing their pricing structure on their websites. But is this trend beneficial for your business? Let’s dive into the complexities of pricing in our industry and explore insights from experienced professionals to help you navigate this challenging aspect of your business.

The Pricing Dilemma: To Disclose or Not to Disclose?

A member of our design community recently shared an observation about a website stating, “We share our discount and charge you a 30% procurement fee.” This cost-plus model has sparked debate among designers. As a professional, you might be wondering: Is this becoming the norm? Should you adopt this level of transparency?

Understanding Cost-Plus Pricing

Cost-plus pricing involves charging a set percentage on top of your costs, typically around 30%. While it offers transparency, many seasoned designers argue against this level of disclosure. They worry it might devalue your expertise and attract clients focused solely on discounts.

The Business Side of Interior Design

Remember, your creative skills are just one part of your value proposition. Your pricing needs to reflect:

  • Your time and expertise
  • Industry relationships
  • Project management abilities
  • Convenience you offer clients in handling complex procurement processes

Common Pricing Models in Interior Design

  • Flat Fee plus Markup
  • Hourly Rate plus Retail Pricing
  • Project-Based Pricing
  • Cost-Plus Model

Insights from Top Designers

Let’s look at what some of the most successful designers in our community have to say:

1. Data-Driven Pricing

houseoffunkdesign shares: “

I’ve priced my services every which way. It took me years – and a few tough lessons – to come up with a pricing structure that I love… and I mean LOVE… and clients do too.

I use past project data to project the design fee, freight, tax and budget. If you don’t have past project data, start collecting it now; the total square foot, the total furnishings spend, the total design time, even the total freight… When you use the averages of past project data to project the future – it’s accurate. And, with a strong process and design agreement, you can ensure that you are profitable. I’m able to provide the full project cost upfront, including the flat design fee, furnishings budget, tax and freight. Then, my client actually knows if they can and/or want to get involved in this project at that price.

Clients LOVE knowing what they’re in for financially from the very beginning. And, the relationship is so much smoother; you really only have to talk numbers once. Lastly, I purchase to the trade and sell goods at reasonable retail. That discount was meant for DESIGNERS. 😘”

Key Takeaway: Use historical data to create accurate, upfront pricing. Clients appreciate knowing the full financial commitment from the start.

2. Balanced Transparency

alisaberrydesigns advises: ” Here is my take on this. I charge a flat fee for my services. It is based on the scope of the project, not the time it will take me to complete it. It includes my knowledge and experience. This is transparent. I am also transparent that if I am selling product to a client, I am marking it up. How much I mark up is my business and it depends on what that item is. If I am suggesting an item at retail, it is what it is whether I get it at a discount or not.

It’s not about being competitive. That’s scarcity mindset and I understand that many may not have the work they want right now so they do what they feel is necessary. But here is the thing, if you continue to make less, you will always be struggling. You will always have to take on more work than you can handle.

You should be charging your worth for your time, your procurement, and your pain and suffering 😂. I had to throw that in because there are always those days. Once you begin to do this, you will have less of a scarcity mindset. Been there done that and took a long time to pay off the debt from trying to make a living that way. I do not ask my clients how they make their money and it’s quite frankly none of their business how I make mine.”

Key Takeaway: Be clear about your fee structure and the fact that you mark up products, but maintain that specific percentages are proprietary.

3. Protecting Your Profit Margins

ecinteriors argues: “No legitimate and successful business discloses this information. Not sure where this “Transparency” trend originated from, but being transparent does not mean disclosing all the ways you make a profit. It’s hands down the worst and most ignorant way to run a profitable business. And for those that think it builds trust with the client, it doesn’t, it actually works against you and devalues your role as an authority figure. It makes you appear cheap and therefore attract cheap clients. People buy exclusivity and clout not something they can get off the shelf which is why they hire a designer.

We work on a flat fee basis, operating our firm as any other company would to be profitable. Nor do we feel it’s necessary to disclose MU. Clients want a design firm to be profitable because they don’t run the risk of their funds being misappropriated or stolen. And when we’ve been asked about discounts, never from a client, we simply say with a smile, “What discounts, oh you have us confused with Walmart.”

Key Takeaway: Consider keeping your specific markup information private to maintain your competitive edge and profitability.

Practical Considerations for Pricing Your Services

As you refine your pricing strategy, consider these points:

  • Balance transparency with profitability
  • Clearly communicate your value proposition
  • Use data to inform your pricing decisions
  • Be consistent in your approach across clients

Conclusion: Finding Your Pricing Sweet Spot

Your pricing strategy is a crucial part of your business model. As you reflect on the insights shared here, consider:

  • Your target clientele
  • Your business goals
  • The image you want to project in the market

Remember, there’s no one-size-fits-all approach. The key is finding a strategy that works for you and your clients.

Your Turn: How Do You Handle Pricing?

We’d love to hear your perspective. How do you structure your pricing, and what level of transparency do you offer clients? Share your thoughts in the comments below!

Scroll to Top