Markdown Calculator (Retail Price Reduction)
Find the sale price from a markdown percentage or the markdown % from a sale price, plus the margin left and the extra sales needed to keep profit.
A markdown is a cut to a product’s selling price, usually to clear slow stock, end-of-season lines or damaged goods. This calculator gives the sale price from a markdown percentage, or the percentage from a sale price, and if you enter the unit cost it shows what the markdown does to your margin and how many more units you must sell to earn the same gross profit.
How to use this tool
- Choose whether you know the markdown percentage or the new sale price.
- Enter the original selling price and the markdown or sale price.
- Optionally enter the unit cost to see margins and a markdown ladder.
- Optionally enter how many units are marked down to see total markdown dollars.
Formula
Sale price = original price × (1 − markdown % ÷ 100)
Markdown % = (original price − sale price) ÷ original price × 100
Extra units needed (%) = [(original price − cost) ÷ (sale price − cost) − 1] × 100
Markdown is measured against the original selling price, not the cost. Margin is gross profit divided by the selling price.
Example
A jacket priced at $50 that cost $30 is marked down 20%. The sale price is $50 × 0.8 = $40, a markdown of $10 a unit; on 100 units that is $1,000 of markdown dollars. The margin falls from 40% to 25% and profit per unit halves from $20 to $10, so you need to sell 100% more units to make the same gross profit.
Frequently asked questions
Is a markdown the same as a discount?
On the price tag they work the same way. Retailers usually say markdown for a price cut on their own stock and discount for a reduction given to a particular customer, coupon or checkout promotion.
What is the difference between markup and markdown?
Markup is added to cost to set a selling price; markdown is taken off the selling price. They do not cancel out: $100 cost plus a 25% markup is $125, and $125 less a 25% markdown is $93.75.
How deep should a markdown be?
Use the ladder. Each step shows the margin left and the sales lift needed to keep the same gross profit. If the lift needed is unrealistic, a smaller markdown, a bundle or another sales channel may lose less money.
Last updated: 2026-10-30