Keystone markup: doubling cost, and what that really yields
Keystone means doubling your cost to reach the client price — a 100% markup, which is a 50% gross margin. Where the convention comes from, what half-keystone means, and why the two percentages differ.
By Idan Mann, founder of NYA
The short answer
Keystone markup means doubling your cost: the client price is your net cost multiplied by two. That is a 100% markup, which produces a 50% gross margin — the same transaction described from the cost side and from the selling-price side. Half-keystone is a 1.5× multiplier, or 50% markup.
Keystone is a retail convention that the design trade inherited: buy at net, sell at double. Its appeal is that it needs no arithmetic. Its risk is that it is a multiplier applied without reference to the work involved — the same 2× that is generous on a $200 lamp can be indefensible on a $40,000 sectional.
Keystone in the two percentages that matter
| Convention | Multiplier on cost | Markup | Gross margin |
|---|---|---|---|
| Half keystone | 1.5× | 50% | 33.3% |
| Keystone | 2× | 100% | 50% |
| Keystone and a half | 2.5× | 150% | 60% |
| Double keystone | 4× | 300% | 75% |
Where keystone breaks down
- On expensive single items, where a flat multiplier produces a fee unrelated to the effort of specifying one piece.
- When freight and receiving are large, because doubling the goods and passing the logistics through at cost quietly dilutes the margin below 50%.
- Under a disclosed cost-plus agreement, where the client sees your net cost and a 100% addition invites a negotiation you would rather not have.
Common questions
- Is keystone markup standard in interior design?
- It is a widely understood reference point rather than a standard rate. Firms work at everything from a modest percentage over net to well above keystone, and the same firm often varies the multiplier by category. What matters is that the contract states the basis.
- What is the multiplier for a given markup?
- Multiplier equals 1 plus the markup expressed as a decimal: 35% markup is 1.35×, 100% markup is 2×. Our calculator shows the multiplier, the markup and the resulting margin together so the three can never drift apart in your head.