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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    
       
       
       

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©1998-2025 Profits Plus Solutions, Inc.
Tom Shay
PO Box 128
Dardanelle, AR 72834
(727)823-7205

JUNE 2025
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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

Advisories

A contemporary definition of management by crisis is "making decisions according to the problems at hand, many of which did not exist when you go to work each morning." How are you doing?

Small Business

News

 

Top Story

July 1 marks the start of Independent Retailer Month. This will be the 23rd year. We tell the how and why we created Independent Retailer Month. And, why we believe you cannot shame customers into shopping with you.


Article of the Month

The second part of "Traits of the great" as we look at ideas of what we have learned from the great small business owners.


Book of the Month

With Warren Buffet retiring, we thought it appropriate for our book of the month to be, "Warren Buffet - The Sage of Omaha". What he shares can be applicable to our small business.