Cost of Goods Sold (COGS) in interior design refers to the direct costs incurred in creating and delivering a design project. It includes the cost of materials, furniture, labor, and subcontracted work but excludes indirect costs like office rent, marketing, or administrative expenses.
📌 Components of COGS in Interior Design
1. Materials & Furnishings 🛋
These include all items purchased for the project.
✔ Furniture (Sofas, Beds, Wardrobes, Dining Tables)
✔ Flooring (Tiles, Marble, Wood)
✔ Paint & Wall Finishes (Wallpaper, Texture Paint)
✔ Lighting Fixtures (LEDs, Chandeliers)
✔ Decor Items (Rugs, Curtains, Artwork)
💰 Estimated Cost Share: 50% – 70% of the total project budget
2. Labor & Contractor Costs 👷♂️
Hiring professionals for installation and construction work.
✔ Carpentry & Woodwork
✔ Plumbing & Electrical Work
✔ Painting & Wallpapering
✔ Flooring & Ceiling Installation
💰 Estimated Cost Share: 15% – 25% of the total budget
3. Subcontractor Fees 🔨
Some parts of the project may require outsourced specialists, such as:
✔ Modular Kitchen Manufacturers
✔ False Ceiling Installers
✔ Custom Furniture Makers
💰 Estimated Cost Share: 5% – 15% of the total budget
4. Shipping & Logistics 🚚
✔ Transportation of materials & furniture
✔ Handling & delivery charges
💰 Estimated Cost Share: 3% – 7% of the total budget
5. Miscellaneous & Hidden Costs 💡
✔ Permits & Licensing Fees
✔ Waste Removal & Cleanup
✔ Site Supervision
💰 Estimated Cost Share: 2% – 5% of the total budget
📊 Formula to Calculate COGS
📌 COGS Formula: COGS=(MaterialCosts+LaborCosts+SubcontractorFees+LogisticsCosts+MiscellaneousCosts)COGS = (Material Costs + Labor Costs + Subcontractor Fees + Logistics Costs + Miscellaneous Costs)
Example Calculation for a ₹10,00,000 Interior Project:
| Expense Category | Percentage | Cost (₹) |
|---|---|---|
| Materials & Furnishings | 60% | ₹6,00,000 |
| Labor & Contractors | 20% | ₹2,00,000 |
| Subcontractors | 10% | ₹1,00,000 |
| Logistics | 5% | ₹50,000 |
| Miscellaneous | 5% | ₹50,000 |
| Total COGS | 100% | ₹10,00,000 |
🔹 How COGS Affects Interior Design Pricing?
Interior designers calculate their service fees based on COGS:
✔ Cost-Plus Model: Adds a markup (10-30%) on the total COGS.
✔ Flat-Fee Model: Charges a fixed amount, regardless of COGS.
✔ Percentage-Based: Charges 10-20% of total project cost, covering both design fees & COGS.
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💬 Got questions? Drop them below! 👇