A shopper’s unexpected find at Restoration Hardware has people debating markup prices—and dropping some knowledge in the process.
Riley and Lu (@rileyandlu) posted a short slideshow to TikTok this week sharing an image of a rug they found at Restoration Hardware. Specifically, they honed in on the tag still attached to the back, revealing more information than the company likely meant for its customers to see.
“When RH forgets to remove the manufacturer tag and it discloses that this rug costs $4.90 per sqft to make…” they wrote. “This 9×12 rug is marked up 1001%…”
Why are products sold at such a high markup?
A manufacturing cost of $4.90 per square foot for a 9’x12’ rug means it cost $529.20 to make. Although the TikToker didn’t disclose the final price, if their calculations were correct, that suggests the rug was being sold for nearly $5,300 in-store—a number that’s in line with Restoration Hardware’s prices for rugs.
But as several viewers pointed out, the price given is the FOB—or Free On Board—cost. What this means is that’s the amount it cost to manufacture the item and load it onto whatever mode of transportation ships it to Restoration Hardware. This doesn’t factor in several costs to the company, including advertisement, storage, distribution to individual stores, or paying employees. This also includes the biggest buzzword of the moment, tariffs.
“Yall be thinking yall should get items by price it takes to make,” commented one user. “Like there’s not 50 more things involved.”
Is a markup of over 1,000% unusual? For most furniture and home goods, probably so. In 2018, Article’s chief marketing officer Andy Prochazka told Forbes that a “typical retail markup” is around 400%. That’s generally enough to account for the additional expenses required to run a company, while still offering prices customers are willing to pay.
Dealing with steep markups
Despite the original poster’s obvious frustration with Restoration Hardware for the markup, most commenters didn’t seem to echo that view.
“I spent over 200k on RH and I know they mark it up a lot. They all do. But I love their stuff,” wrote one commenter.
“I’m confused,” another chimed in, “Are they supposed to sell it at cost? Furniture biz is like buying art. Companies like RH set the trends and come up with new designs and you pay for that innovation.”
One top comment pointed out that learning more about the manufacturer might be able to work in a prospective customer’s favor. “A lady on here ended up getting in contact with an RH manufacturer and literally got the exact same pieces wholesale price,” they said.
Going directly to manufacturers for items isn’t guaranteed to work, although it’s becoming a topic of interest to Americans amidst the country’s tariff woes.
Another way to avoid steep markups? Several viewers suggested checking outlet versions of stores like Restoration Hardware, where items are often discounted when they’re no longer in season or there’s a surplus. There’s also the option of searching for dupes online, or simply buying used.
But if you know exactly what you want, you want it brand new, and you want it now, you might be stuck with those 1,000% markups.
The Daily Dot has reached out to @rileyandlu via TikTok comment and Restoration Hardware via email.
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