Material markup for interior designers: how much is fair?
Purchase rate, price and assign rate explained with worked rupee examples, plus how to set a material markup you can defend in front of any client.
By the Interioflow team · · Updated · 8 min read
Most interior designers in India add a markup on material, and a fair one is whatever covers the real cost of buying, moving, storing and standing behind that material, plus a profit you'd be comfortable explaining to the client. There's no official percentage. What matters more is that you know your purchase rate, your normal price and what each site is actually billed, and that the client knew your pricing model before they signed.
That sounds tidy. In practice, a lot of studios run all three numbers out of one Excel sheet and somebody's memory.
Three numbers, not one
When designers talk about "rate", they usually mean three different things at different times. Separating them is the first fix.
| Rate | What it means | Who should see it |
|---|---|---|
| Purchase rate | What the vendor actually charged you on this bill | You, your accountant, maybe your senior designer |
| Price | What you normally quote this material at | Your whole team |
| Assign rate | What this particular site is billed per unit | Your team, and the client sees the result |
The purchase rate moves. The same 1 mm laminate from the same dealer in Lower Parel can cost you differently in March and in October, and differently again if you bought fifty sheets instead of six. Your price is your standing answer when a client asks "what's this cost?". The assign rate is what you settle on for a specific site, and it can differ from your price. Maybe the Baner 3BHK came with a fixed budget and you agreed to hold the laminate at last year's number. Maybe the Kharadi villa needed a rush order and you're passing on the courier.
If all three live in one column, someone will eventually quote a client your purchase rate by accident. Usually a junior, usually on WhatsApp, usually with a screenshot.
Markup is not margin
This is the arithmetic that quietly eats studio profits.
Say you buy a laminate sheet at ₹1,400 and bill the site ₹1,750.
- Markup is the gain divided by what you paid: ₹350 ÷ ₹1,400 = 25%.
- Margin is the gain divided by what you sold for: ₹350 ÷ ₹1,750 = 20%.
Same ₹350, two different percentages. If you set "25% markup" in your head and then plan your overheads as though you keep 25% of every material rupee, you're already 5 points short. On a site with ₹12 lakh of material, that gap is ₹60,000 you were counting on and never had.
Now take away what that ₹350 has to pay for. The tempo from the dealer to site. The two sheets that chipped at the edge and went into the scrap pile. The hours your designer spent at the dealer matching shades under a tube light. The forty days you waited for the client's second instalment while you'd already paid the dealer in cash. What's left is your actual profit on material, and it's usually much thinner than the percentage suggests.
How to decide your markup
We'd love to give you a number. We won't, because the honest answer depends on what you actually do for the client on each item. Work it out roughly like this:
- List what you carry per category. Plywood and hardware involve bulk buying, storage and wastage. A designer light fitting involves one email and a courier. They shouldn't carry the same markup.
- Price the risk. If you're paying the vendor upfront and the client pays you on milestones, you're funding the site. That money has a cost.
- Add wastage honestly. Ply, laminate, tiles and wallpaper all lose some to cutting. Either bill wastage as its own line or build it into the rate. Not both, and not neither.
- Check against what the client can see. Branded sanitaryware, appliances and fittings have prices printed online. A client will look them up. A heavy markup on a tap they can find on Amazon costs you more in trust than it earns.
- Look at your fee. If your designer fee already pays for sourcing and coordination, a large material markup on top is hard to justify.
That last point deserves its own section.
Fee on material plus markup: the double charge
Plenty of studios charge a design fee as a percentage of the project value, and project value includes material. Then they also add a markup on that material. The client pays your fee on a ₹1,750 sheet that already carries ₹350 of your margin.
That isn't automatically wrong. But if a sharp client works it out (and in Pune and Bengaluru, a lot of your clients are engineers who will), it looks like you charged twice for the same effort.
A cleaner approach is to pick one of these and write it into the agreement:
- Fee on everything, material at cost or a small handling charge. Transparent, easy to explain, and your income is clearly the fee.
- Fee on design and labour only, material carries your markup. Your fee looks smaller, and material pays for sourcing.
- Fee on everything plus markup, but both stated openly, with the reason for each.
We built a switch for exactly this when you set up a site in Interioflow: you choose whether the designer fee applies to materials or not, so the calculation matches what you promised. You can read more about how the fee side works in how interior designers charge fees.
How open should you be with clients?
There's no perfect answer here, and we've seen good studios at both ends.
Open-book studios show the client the vendor bill and add a disclosed fee or handling percentage. The client trusts every number. The trade-off: you'll spend time defending why you didn't buy from the cheaper shop the client's brother-in-law mentioned.
Closed-price studios quote a single rate per item and never show the bill. It's simpler and it protects your vendor relationships. The trade-off: when a client finds the same tile cheaper online, you have nothing on paper to point to except your word.
Most studios end up in between. Bills stay private, but the agreement says plainly that material is supplied at the studio's rate, which includes sourcing, transport, handling and wastage. That one sentence saves a lot of arguments in month four.
A few lines we'd hold to whichever model you pick:
- Never tell a client a rate is "at cost" when it isn't.
- Don't change the rate on an approved quotation without a fresh approval.
- If a client asks you directly whether there's a markup, say yes and say what it covers.
Clients rarely object to a studio earning on material. They object to finding out by surprise, which is how most of these disputes end up as a long WhatsApp thread with the client's CA added halfway through.
Keeping the three rates apart in practice
The trouble usually isn't the decision. It's the bookkeeping. Purchase rates sit on paper bills in a folder, prices sit in someone's spreadsheet, and assign rates get typed fresh into each quotation.
This is where Interioflow helps, because we built it around those same three rates. When you record a material inward against a vendor bill, each line carries its own purchase rate, price and GST, and you can attach the bill and challan photos. You then allocate stock to each site at its own assign rate. The purchase rate is the most guarded figure in the app: the studio admin always sees it, a team member only sees it if your studio policy allows it and their role has the purchase-cost permission, and clients never see it, or the markup, or your vendors. On the purchases side you can apply markup on bills, and the client only sees the final cost on the quotation they approve. There's more on the material and inventory page and on how quotations are built.
You don't need software to do this well, though. You need three columns and the discipline to never paste the first one into a client message.
Quick answers
How much markup should an interior designer charge on material? There is no single correct figure. Work it out from what you actually carry on each item: sourcing time, transport, wastage, credit you extend and the risk of returns. Then check it against your designer fee so you aren't charging twice for the same work.
What is the difference between purchase rate and selling rate? The purchase rate is what the vendor charged you on a specific bill. The selling rate is what the client pays for the same item. The gap between them is your markup, and it should cover real costs, not just be a number you hope nobody checks.
Should I tell clients I add a markup on material? You should never deny it when asked. Many studios either work open-book with a higher fee, or quote a closed price per item and say so in the agreement. Either is fair as long as the client knew the model before signing.
Is markup the same as margin? No. A 25% markup on a ₹1,000 purchase gives a ₹1,250 selling price, but your margin on that sale is only 20%. Mixing the two up is a common reason studios think they earn more on material than they do.
