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Planned markdown calculator

Too many small businesses use a very simple plan in determining the margins of their merchandise. They simply look at the cost and then apply a multiplier factor to the cost to determine the selling price.

As the merchandise ages, they begin to randomly take markdowns in an effort to get rid of the merchandise. If the buyer were to calculate the maintained gross margin when all of the merchandise has been sold, they would likely be surprised at what their margin was. The surprise may be how high of a margin they maintained as well as it could be a surprise as to how low it was; but either way, in most cases they are surprised.

This calculator is created to resolve that. Sophisticated buyers do not settle for looking at their initial margin; they have a plan as to when, with how many on hand, and by how much to mark merchandise down. This is exactly how this calculator works. It allows you to plan for four markdowns over the season of an item. By determining how long the merchandise will be sold at full price, you will then decide when, how many, and by how much the merchandise will be discounted.

Proceed with this calculation for up to four periods, and this calculator will tell you what your maintained margin will be for the entire season of the product. This is a much better way than just guessing as you go through the season, and it is likely that you will end the season with less of the inventory on hand, and with fewer markdowns.

Planned markdown calculator from Profits Plus
       
Yellow indicates squares where info is entered      
       
Inventory Purchase Amount    
Inventory Balance Remaining @ End of Period 1    
Inventory Balance Remaining @ End of Period 2    
Inventory Balance Remaining @ End of Period 3    
Inventory Balance Remaining @ End of Period 4    
       
       
Inventory Sold During Period 1    
Inventory Sold During Period 2    
Inventory Sold During Period 3    
Inventory Sold During Period 4    
       
       
Gross Margin % (original)    
       
       
Discount (% of Retail) Offered in Period 1    
Discount (% of Retail) Offered in Period 2    
Discount (% of Retail) Offered in Period 3    
Discount (% of Retail) Offered in Period 4    
       
       
Gross Margin % (Net of Discount) in Period 1    
Gross Margin % (Net of Discount) in Period 2    
Gross Margin % (Net of Discount) in Period 3    
Gross Margin % (Net of Discount) in Period 4    
       
       
Sales in Period 1 (before discount)    
Sales in Period 2 (before discount)    
Sales in Period 3 (before discount)    
Sales in Period 4 (before discount)    
TOTAL Sales    
       
Sales in Period 1 (net of discount)    
Sales in Period 2 (net of discount)    
Sales in Period 3 (net of discount)    
Sales in Period 4 (net of discount)    
TOTAL Sales    
       
Amount of Discount in Period 1    
Amount of Discount in Period 2    
Amount of Discount in Period 3    
Amount of Discount in Period 4    
TOTAL Amount of Discount    
       
Gross Margin Dollars in Period 1    
Gross Margin Dollars in Period 2    
Gross Margin Dollars in Period 3    
Gross Margin Dollars in Period 4    
TOTAL Gross Margin Dollars    
       
TOTAL Gross Margin % (based on retail)    
TOTAL Discount % (based on retail)    
       
       
Check total for period 1    
Check total for period 2    
Check total for period 3    
Check total for period 4    
       
       
       

MARCH 2024
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Small Business

Conversations

We are taking a break with the Small Business Conversations programs. However, we have the many years of the program cataloged by date on the website.

Small Business

AdvisorieS

The March Small Business Advisory remembers a line from many a western movie; "They went that a-way" and expressions similar to that distract from a business giving great customer service.

Small Business

News

Top Story

The big news item on November 30, 2022 was the advent of ChatGPT; Artificial Intelligence applications which many believe are used exclusively by big businesses.

This does not have to be true as there are many applications we share that have usage in a small business.


Article of the Month

"No plan B"; the subtitle to Van Morrison's Born to Sing album. The idea of no plan B also applies to a small business when you think (or is it when you don't think) about when the time, or opportunity, comes that you can sell your business. Generally speaking, a small business owner gets less money when they decide to close their business.


Book of the Month

"Escape from Cubicle Nation" is the March book of the month. While directed towards those working a corporate job and wanting to become an entrepreneur, we remind readers about utilizing their gut feeling to make decisions in their business.

After all, you did use your gut feeling when you decided to open or purchase your business.

BOOK US

With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.

Small Business

Conversations

We are taking a break with the Small Business Conversations programs. However, we have the many years of the program cataloged by date on the website.

Small Business

Advisories

The March Small Business Advisory remembers a line from many a western movie; "They went that a-way" and expressions similar to that distract from a business giving great customer service.

Small Business

News

 

Top Story

The big news item on November 30, 2022 was the advent of ChatGPT; Artificial Intelligence applications which many believe are used exclusively by big businesses.

This does not have to be true as there are many applications we share that have usage in a small business.


Article of the Month

"No plan B"; the subtitle to Van Morrison's Born to Sing album. The idea of no plan B also applies to a small business when you think (or is it when you don't think) about when the time, or opportunity, comes that you can sell your business. Generally speaking, a small business owner gets less money when they decide to close their business.


Book of the Month

"Escape from Cubicle Nation" is the March book of the month. While directed towards those working a corporate job and wanting to become an entrepreneur, we remind readers about utilizing their gut feeling to make decisions in their business.

After all, you did use your gut feeling when you decided to open or purchase your business.