Markdown calculator for retail price reductions
Turn an original price, a new price and a unit count into the per-unit reduction, the percentage and the total dollars given up. Nothing you enter is saved.
A markdown is a permanent reduction in the selling price of merchandise. Retailers take markdowns to clear slow sellers, end a season or correct a price that was set too high, and they record the reduction in dollars of retail value because that is what the stock was carried at. This free markdown pricing calculator turns an original price, a new price and a unit count into the per-unit reduction, the percentage and the total dollars given up.
The calculation uses only the figures you type. It does not read your inventory or POS data, and nothing you enter is saved or sent anywhere.
How to use this calculator
- Enter Original selling price: the ticket price before the reduction. It must be greater than zero.
- Enter Marked-down price: the new selling price. It cannot be higher than the original price.
- Enter Units to mark down: how many units will carry the new price, so the tool can total the dollars.
- Select Calculate. To load the sample figures first, select Use example.
Each field accepts a number from 0 to 1,000,000,000. Percentages are shown to two decimals and money to the cent. Results show labeled values and the step-by-step arithmetic.
Markdown percentage formula
The percentage is taken on the original price, not the new one.
Markdown per unit = original selling price − marked-down price
Markdown percentage = markdown per unit ÷ original selling price × 100
Total markdown = markdown per unit × units marked down
The third line is the figure merchandise planners track, because it reduces the retail value of inventory on hand and therefore the gross margin the stock can still deliver. Shopify's retail math reference explains how gross margin is measured from retail sales and cost of goods sold.
Markdown calculation example
| Input | Sample value |
|---|---|
| Original selling price | $40 |
| Marked-down price | $28 |
| Units to mark down | 25 |
Subtracting the $28 new price from the $40 original price leaves a markdown amount of $12 per unit. Dividing $12 by $40 and multiplying by 100 gives a markdown of 30%. Across 25 units, the total reduction comes to $300. The results panel shows "Markdown per unit" $12, "Markdown percentage" 30% and "Total markdown dollars" $300.
Markdown vs discount
A markdown changes the price on the ticket for every unit until the item sells out or the price is changed again. A discount is a temporary reduction at the register, such as a coupon, a loyalty reward or a weekend promotion, after which the ticket price returns. Both reduce the money taken for the unit, but a markdown reduces the retail value of the stock still on the shelf as well, which is why planners budget for it. If you advertise the new price against the old one, 16 CFR 233.1 on former price comparisons (Cornell LII) sets out when a former price can be used as a comparison in the United States.
To print the new price, use the sale sign maker. To see what the new price does to profit on cost, the margin and markup calculator shows gross profit per unit. The sell-through calculator shows whether the item needed the reduction, and the initial and maintained markup calculator shows what repeated reductions do to the markup you keep. Our retail markdown strategy guide covers when to cut and how deep.
Frequently asked questions
How to calculate markdown percentage
Subtract the new price from the original, divide by the original and multiply by 100. The base is the original price every time. A $40 item marked to $28 is a 30% reduction; the same $12 measured against the $28 new price would be 42.86%, which is a markup figure, not a markdown rate.
Is this a markdown price calculator or a percent-off calculator
Both, in the direction from prices to percentage. Enter the two prices and the tool returns the percentage. To go the other way, from a percentage to a price, multiply the original price by (100 minus the percentage) and divide by 100. For 30% off $40 that is $40 × 70 ÷ 100 = $28.
Why does the tool refuse a marked-down price above the original
Because that would be a price increase, which this tool does not measure. Enter the original price as the higher figure. The marked-down price can equal the original, which returns a 0% result, and it can be zero for stock given away or written off.
Should the reduction be tracked per unit or in total
Both figures matter, for different decisions. The per-unit figure tells you whether the new price still covers cost; the total tells you how much retail value left the inventory and how far the gross margin for the period will fall. Buyers who plan a season usually set a total budget for reductions and compare each decision against what remains.
Related free tools
Explore headoffis features for managing your stores, stock and team.