What’s in a markup? Designers dispel some of the mysteries behind the cost-plus model—including how it can be applied to products and services, and why it matters to their firms and the industry at large.

Nothing invites more industry debate (or confusion) than the topic of markups. The mechanics remain a mystery to the uninitiated, and quickly get complicated even for those in the know—a mix of target profit margins and discounts that fluctuate for every category, service and vendor relationship. It’s no surprise, then, that every firm approaches markups in its own way.

“If you line up 10 designers, you’re going to get 10 different answers,” says Los Angeles designer Kevin Isbell. “If you line up 100 designers, you’ll get 100 different answers.”