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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. |
NOVEMBER 2024
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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
Perhaps you have investments outside of your small business; gold, stocks, bonds or money market funds. With each you likely know what the rate of return is.
What about your busines? Do you know what the rate of return is for your business? You should. After all, you do not want to be the person who has just bought themselves a job.
Small Business
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It is not going to work. People select where they do business based on positive reasons. We discuss what we are seeing.
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Fix This Next by Mike Michalowicz. We love this description of the book; The biggest problem entrepreneurs have is that they do not know what their biggest problem is.
If you find yourself trapped between stagnating sales, staff turnover, and unhappy customers, what do you fix first? Every issue seems urgent - but there is no way to address all of them at once. The results? A business that continues to go in endless circles putting out urgent fires and prioritizing the wrong things.
