There are as you can see lots of ways for interior designers to charge, and as it's an unregulated industry (unlike architects) there is no set method.
To do the job properly takes time. I used to visit the client for an initial free consultation to take a proper brief including photos, details of items to be kept, use of the room etc. I would then write to the client confirming the brief and agreeing a set fee, 50% of which was due as a deposit. I'd then return, measure up the room, take colour references of items to be kept, more pictures, more chatting with the client.
Then I'd put together at least two schemes which could include lighting plans, furniture layout drawings, samples of all finishes, pictures of suggested furniture (including taking them to try out sofas for comfort if necessary) and lighting etc etc.
The chosen scheme would then be tweaked and costed. Costing a room scheme can take a day at least. Finally the client would get the full quotation including samples of all the finishes proposed and pics of furniture and lighting proposed. Second half of fee was then payable.
I thought this was the fairest way for the client and for me. Taking a % of the room scheme only works if the client buys anything, and therefore there's (a) the risk that they take all your ideas and then try and source things off the internet themselves so you get nothing at all and (b) the risk to the client that you propose a more expensive scheme to get a bigger fee.
If the client went ahead, I would charge retail prices for everything, and my time would be paid for by the margin I made by negotiating trade discounts. For this the client got their deliveries managed by me, project management of decorators, builders etc and general problem-solving. This is where a designer really works for their money as they are the first person to be phoned either by the client or the builder/decorator/curtain maker, so they're stuck in the middle.
To be fair, I was working at the higher end of the market so five figure sums per room were the norm. But even then, it's really hard to make a proper living, even without the overheads of a shop. Which is why I don't anymore. 
Sorry, not meant to be a rant, just wanted to put the other side of the story.....