Calculate the list price (or tag price) you need to set in order to allow for a customer discount and still maintain your desired revenue, gross profit, gross margin or mark up on a product or service.
Use this calculator to calculate the tag price of an item when you want to allow for a markdown and still attain your desired revenue (selling price actually recieved), gross profit, gross margin and mark up.
Revenue = Price (selling price)
Suppose your company wants to maintain a gross margin of 75% on an item that costs $10 to make or buy. And, you want to allow room in the price to give customers a 20% discount off the listed price. The discount you allow is the price markdown.
On the calculator enter:
You will find that your required List Price will be $50 and you will allow a markdown of $10 (20%) with your actual Selling Price (Revenue) = $40 giving you a gross profit of $30 ($40 - $10) which still maintains your Gross Margin of 75% ($30/$40).
Checking the result ......
To work without the markdown you can use our straight sales calculator.
If you know at least 2 values, and 1 value is a dollar value, you can calculate the other 3 after some algebraic manipulation of the three equations. This calculator will calculate any three of the sales values based on any 2 inputs that you provide.