Markdown Calculator
También en español: Calculadora de descuentos →
- Cost
- Profit
Profit per item falls from $44.00 to $24.00. You'd need to sell 1.83× as many to earn the same.
How the markdown calculation works
Markdown is a cut from the original price
25% off an $80 item is $20, so the sale price is $60.
Markdown formula: markdown % = markdown ÷ original price
If you know the sale price instead: ($80 − $60) ÷ $80 = 25%.
Margin after markdown uses the sale price
On a $36 cost, margin drops from ($80 − $36) ÷ $80 = 55% to ($60 − $36) ÷ $60 = 40%.
Check the volume you need
Profit per item falls from $44 to $24, so you need about 1.83 times the sales to earn the same.
Worked example. An item priced at $80 that cost you $36 is marked down 25%. The markdown is $20, the sale price is $60, and the margin falls from 55% to 40%.
Markdown FAQ
How do I calculate a markdown?
Multiply the original price by the markdown percentage and subtract it. 25% off $80 is $20, for a $60 sale price.
How do I calculate markdown percentage?
Subtract the sale price from the original price, divide by the original price and multiply by 100. ($80 − $60) ÷ $80 = 25%.
What is the difference between markdown and markup?
Markup is added to the cost to set a price. Markdown is taken off a price to sell slow stock. Markup is based on cost; markdown on the original price.
How much can I mark down before losing money?
Up to (original price − cost) ÷ original price. On an $80 item that cost $36, that's 55%.
What is a markdown in retail?
A markdown is a cut in an item's selling price, usually to clear slow, seasonal or damaged stock. It is measured against the original selling price, not against your cost.
How many more items do I need to sell after a markdown?
Divide the old profit per item by the new one. On an $80 item that cost $36, a 25% markdown cuts profit from $44 to $24, so you need about 1.83 times the sales. At 40% off, profit is $12 and you need about 3.67 times.
Is a markdown the same as a discount?
Close. A markdown is a permanent price cut on the item; a discount is often temporary or limited to some buyers, like a coupon.