Three Takeaways from Our Podcast Episode on Product Margins

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Few topics spark more debate among designers than product markup. Some firms use cost-plus, others split discounts, some charge retail, and a handful pass everything straight through to the client. That lack of consensus can make even experienced designers second-guess their approach.

In Episode 85 of the DesignDash podcast, co-founders Laura Umansky and Melissa Grove take a clear position: interior designers should be making a margin on product. Their conversation goes way beyond the yes-or-no question and into the realities behind it, from procurement risk and vendor relationships to client perception and pricing strategy.

Of course, the real issue here isn’t whether you charge for markup. We’re really talking about how designers structure their businesses, communicate value, and account for the many phases of a design project.

Three Takeaways from Episode 85 of the DesignDash Podcast

#1 Product sales and design services belong in separate buckets

One of the first things Laura clarifies in this episode is how her firm separates design services from product. Both are part of the same project, but they need different structures because they represent different types of work.

At Laura U Design Collective, clients receive a consistent product price structure even when the firm is sourcing across multiple vendors, showrooms, and retail channels. Laura explains that clients receive 15% off retail from to-the-trade and wholesale vendors. Retail purchases are handled differently, but the firm keeps the system simple enough for clients to understand.

That consistency protects the client experience. A lighting vendor, upholstery workroom, rug source, and accessory purchase may all involve different terms behind the scenes. The client doesn’t need to sort through each vendor’s discount structure to understand the proposal in front of them.

Design services cover concept development, drawings, selections, revisions, meetings, and the creative direction behind the project. Product sales involve sourcing, pricing, ordering, tracking, receiving, and delivery. When those categories are blended, it’s harder for the firm to understand what is earning revenue and where the work is draining resources.

A single space might include a custom sofa, multiple fabrics, trim, case goods, lighting, rugs, and accessories. Each item may come from a different vendor with its own pricing and timeline. The client approves a proposal, but the firm manages the sourcing behind it. Separating services from product gives the business a simpler, cleaner way to evaluate both. Design fees can be reviewed as design fees. Product margin can be reviewed as product margin. Clarity is key when there are a bunch of moving parts, which there always are in a design project.

Takeaway for Firm Owners

Define your pricing structure clearly enough that clients can understand it, even if the back-end margin varies by vendor.

#2 Procurement carries real risk, labor, and responsibility

Don’t discount the risk you take on as a firm. You’re insulating your clients from that risk and should be compensated as such. When Melissa talks about product margin, she’s examining it from the operations side of Laura U. Ordering furniture, lighting, rugs, window treatments, and accessories for a full home is not the same as clicking “add to cart.” A firm is managing deposits, timelines, vendor communication, receiving, inspection, repairs, storage, delivery, and installation. On a large project, that can mean hundreds of individual items moving through your system at once.

That risk is real! A piece can arrive damaged. A sofa can arrive in the wrong color. A custom item can need repair before installation. When that happens, the client won’t want to hear every detail. They hired a full-service firm so they wouldn’t have to manage the mess.

That’s what clients of a design firm are paying for, even if they never see it itemized on a bill. Your team catches the mistake, contacts the vendor, decides whether the piece needs to be repaired or replaced, updates the schedule, and keeps the installation moving. The client experiences a smoother process because your firm absorbs the friction of those bumps.

Even one single item can be incredibly complicated. A custom chair might involve a frame, finish, fabric, upholstery, freight, receiving, and inspection. Drapery can involve measuring, hardware, fabrication, lining, motorization, and installation. Even one pillow can involve several components before it finds its way to the client’s new sofa.

Across an entire home, that degree of labor multiplies. Product margin helps fund the people, systems, and time required to manage all of it. Without that margin, the firm still bears the responsibility, just without enough compensation for the work they do.

Takeaway for Firm Owners

Your margin should account for the work and risk behind procurement, not just the physical product.

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#3 Marking up product isn’t double dipping!

Designers often worry that charging for design services and making a margin on product will look like double dipping. Melissa addresses that concern in the podcast because it comes up all the time, especially when designers are trying to explain pricing to clients who are used to shopping online.

A client might be able to buy a retail piece on their own, and Laura says LUDC will give them every specification if they want to do that. But then the client has to manage the order, delivery, inspection, damage claims, replacement issues, and installation themselves. That tradeoff isn’t typically worth the client’s time when they figure out everything that’s involved.

Melissa also points to access. Some vendors simply aren’t available to clients without a designer; they only sell “to the trade”. Some require established trade relationships, buying power, or a certain level of business before they’ll work with a firm at all.

This access is part of what your clients are paying for. So is the time it took to build those relationships. Laura talks about the years her firm has spent developing vendors, finding new sources, shopping markets, and building a stable of resources the firm can pull from.

Unfortunately, there’s a strange amount of scrutiny around markup in interior design that doesn’t seem to apply to other industries. Laura and Melissa joke through a few examples in the episode, but it’s true. Clients don’t walk into Target and ask what the store paid for a toothbrush. They don’t ask a restaurant to disclose the cost of the wine, salt, or produce behind the meal. Retailers, restaurants, showrooms, and vendors all build margin into what they sell.

Because of this, it’s better to just integrate the cost and avoid industry-heavy language that clients either stigmatize or don’t understand. You know what industry norms are but your client doesn’t.

At LUDC, the client-facing language is simple and streamlined: clients receive 15% off retail from the firm’s to-the-trade and wholesale vendors. Behind the scenes, the firm still makes a margin because vendor discounts vary. That structure gives the client a clear benefit while allowing the business to account for access, sourcing, procurement, and risk.

Takeaway for Firm Owners

Stop apologizing for product margins.

Final Thoughts

So yes, designers should be making a margin on product. Design services and product sales are different types of work, even if your firm doesn’t have two separate teams handling them. Procurement poses real risk and responsibility. Vendor access and sourcing knowledge take years to build. All of that is “invisible labor” hidden in the finished project a client sees and enjoys. A pricing structure that reflects those realities is easier to explain and easier to sustain over time, so please make a margin on product!

Watch the Full Episode on DesignDash

Watch Episode 85 of the DesignDash Podcast to hear the full conversation between Laura Umansky and Melissa Grove. They cover product pricing, vendor relationships, procurement risk, and how to structure your business so it supports both the creative and operational sides of design.