Markdown Optimization Calculator
Determine optimal markdown timing and depth to maximize sell-through while protecting margins.
Inputs
Results
Recommended Markdown %
22.5%
New Price
$38.74
≈ 8 cups of coffee
How to Use This Calculator
- Enter the original retail price ($), cost ($), and weeks since the product was introduced.
- Enter the current sell-through percentage and your target sell-through percentage.
- Review the recommended markdown percentage needed to close the gap to your target.
- Check the new discounted price, the resulting margin, and the estimated weeks remaining to reach your target sell-through.
- Apply markdown early in the season for better sell-through -- deep late-season markdowns sacrifice more margin.
How the result changes with Weeks Since Introduction
| Weeks Since Introduction | Recommended Markdown % | New Price |
|---|---|---|
| 5.2 | 22.5% | $38.74 |
| 18 | 40.5% | $29.74 |
| 34 | 40.5% | $29.74 |
| 47 | 40.5% | $29.74 |
What each input means
- Original Price
- Original retail selling price of the item
- Cost Price
- Wholesale or landed cost of the item
- Weeks Since Introduction
- Number of weeks the product has been on the sales floor
- Current Sell-Through %
- Percentage of initial inventory already sold
- Target Sell-Through %
- Desired sell-through percentage by end of season
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersOriginal Price = 49.99, Cost Price = 20, Weeks Since Introduction = 8, Current Sell-Through % = 35 = 5 input(s) provided
- Calculate Recommended Markdown %22.5 = 22.5%
- Calculate New PriceNew Price38.74 = $38.74
- Calculate Margin at New PriceMargin at New Price48.37 = 48.37%
- Calculate Est. Weeks to TargetEst. Weeks to Target8 = 8
Engine last updated . Checked against 3 independently-derived tests — how we verify calculators.
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