Retailers mark down slow-moving stock to clear shelves. Markdowns are applied to the selling price, not the cost, so a big markdown can push a product below cost.
How to use the Markdown Calculator
- Original price
- Markdown
- Cost (optional)
- Every result field is editable: type into Sale price and Markdown plus every other field update to match.
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the original price and the markdown percentage – or type the sale price into the result.
Tips
- Know the difference between margin (profit ÷ price) and markup (profit ÷ cost).
- Apply successive discounts one after another – they do not simply add up.
- Check whether prices already include sales tax or VAT.
- Round prices only at the very end of the calculation.
Common mistakes to avoid
- Adding discount percentages together.
- Pricing from a target margin using the markup formula.
- Forgetting payment-processing and shipping fees.
Inputs explained
| Field | What to enter |
|---|---|
| Original price | Amount in your currency |
| Markdown | In % |
| Cost (optional) | Amount in your currency |
What each result means
- Sale price = [Original price]×(1 – [Markdown]÷100)
- Markdown amount = [Original price] – [Sale price]
- Profit at the sale price = [Sale price] – [Cost (optional)]
- Margin at the sale price = ([Sale price] – [Cost (optional)])÷[Sale price]×100
Example values
How the main result changes when Markdown changes and everything else stays at the example values above:
| Markdown (%) | Sale price |
|---|---|
| 15 | 102 |
| 22.5 | 93 |
| 30 | 84 |
| 37.5 | 75 |
| 45 | 66 |
| 60 | 48 |
Formula
Sale price = original × (1 − markdown %)Markdown % = (original − sale price) ÷ original × 100Markdown amount = original − sale priceWorked example
Inputs — Original price: $120; Markdown: 30 %; Cost (optional): $70.
Results — Sale price = $84.00; Markdown amount = $36.00; Profit at the sale price = $14.00; Margin at the sale price = 16.67 %.
Frequently asked questions
What is a markdown?
A reduction from the original selling price.
How is markdown different from a discount?
Markdowns are permanent price cuts; discounts are often conditional or temporary.
Markdown vs markup?
Markup is added to cost; markdown is taken off the price.
What formula does the Markdown Calculator use?
Sale price = original × (1 − markdown %).