Markdown Calculator

Find the discounted sale price after a percentage markdown, see the margin left over unit cost, and total the markdown value across your inventory.

Quick Facts

Formula
Sale Price = Original x (1 - Markdown% / 100)
The markdown percentage is applied directly to the original price to get the discounted sale price.
Margin check
Margin% = (Sale Price - Unit Cost) / Sale Price x 100
Compares the marked-down price against unit cost to confirm the item still sells at a profit.

Your Results

Calculated
Sale price
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Original price after the markdown
Markdown amount
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Dollars and percent removed per unit
Margin at sale price
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Profit margin vs. unit cost
Total markdown value
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Markdown amount x units marked down

Ready

Enter the original price, markdown percentage, unit cost, and units marked down, then press Calculate.

How the Markdown Calculator works

A markdown is a percentage reduction applied to an item's original price to reach a new, lower sale price — the everyday math behind clearance racks, seasonal sales, and end-of-life inventory clearance. This calculator applies the standard retail markdown formula, then checks the result against unit cost so you can see whether the discounted price still turns a profit.

The formula

For an original price P and a markdown percentage m, the sale price is:

Sale Price = P × (1 − m / 100)

The markdown amount in dollars is simply P − Sale Price. If you instead know two prices and want the percentage, rearrange the formula: Markdown % = (P − Sale Price) / P × 100. To check profitability after the price cut, the calculator also compares the sale price to a unit cost you provide: Margin % = (Sale Price − Unit Cost) / Sale Price × 100.

Worked example

Take a $100 item marked down 30%, with a $45 unit cost and 50 units being cleared. The sale price is $100 × 0.70 = $70.00, a markdown of $30.00 per unit. Against the $45 cost, the margin at the new price is (70 − 45) / 70 × 100 ≈ 35.7% — still comfortably profitable. Clearing all 50 units at the marked-down price removes $1,500.00 of revenue compared with selling them at the original price.

What moves the result most

  • Markdown percentage: the sale price and margin both move directly with this input — a 10-point increase in markdown removes 10% more from the original price.
  • Unit cost: a higher cost basis eats into margin faster as the markdown deepens, and can push the margin negative even at modest discounts.
  • Units marked down: only affects the total markdown value, not the per-unit sale price or margin — it scales the dollar impact of the discount across your inventory.

Stacking multiple markdowns

Successive markdowns compound rather than add. A 20% markdown followed by a further 10% markdown off the new price is not a 30% total reduction — it leaves 0.80 × 0.90 = 0.72 of the original price, a combined 28% markdown. To model a second markdown, run the calculator once, then use its sale price as the new original price for the next pass.

Next steps

  • Record the original price, markdown percentage, and unit cost together so the sale price and margin can be recreated later.
  • Before applying a markdown to a whole product line, check it against a small sample to confirm the margin still holds.
  • Re-run whenever the unit cost changes — supplier price changes shift the margin even if the sale price stays the same.

Frequently Asked Questions

How is the markdown sale price calculated?
Sale Price = Original Price × (1 − Markdown % ÷ 100). A $100 item marked down 30% sells for $100 × 0.70 = $70. The markdown amount in dollars is simply the original price minus the sale price.
How do I find the markdown percentage from two prices?
Rearrange the formula to Markdown % = (Original Price − Sale Price) ÷ Original Price × 100. If an item drops from $80 to $60, the markdown is (80 − 60) / 80 × 100 = 25%.
What does the margin at sale price tell me?
It is the gross margin remaining after the markdown, calculated as (Sale Price − Unit Cost) ÷ Sale Price × 100. A positive margin means the sale price still covers cost and leaves profit; a negative margin means the item is being sold below cost.
Can I apply two markdowns one after another?
Yes, but successive markdowns compound rather than add. A 20% markdown followed by a further 10% markdown is not a 30% total markdown — it leaves 0.80 × 0.90 = 0.72, a combined 28% reduction from the original price. Calculate one markdown at a time, using the prior sale price as the new original price for the next step.

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