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List Price Markdown Calculator

List Price Markdown
Answer:
List Price = $
Gross Profit:
$
Cost:
$
Revenue:
$
Mark Up:
%
Gross Margin:
%
Markdown:
(built into List Price)
$
(%)
List Price Required:
(Revenue + Markdown)
$

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Calculator Use

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 markup on a product or service.

Revenue = Price (selling price)

Example List Price Markdown Calculation

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:

  • Select know values: Cost and Margin
  • Gross Margin = 75%
  • Cost = $10
  • Markdown = 20%
  • Calculate

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

  • Markdown = 50 x 20% = 10
  • Revenue = List Price - Markdown = 50 - 10 = 40
  • Gross Profit = Revenue - Cost = 40 - 10 = 30
  • Gross Margin = Gross Profit / Revenue = 30 / 40 = 75%

To work without the markdown you can use our straight Sales Calculator.

Sales Variables

  • Cost (C)($)
  • Revenue (R)($) or selling price
  • Gross Profit (P)($)
  • Gross Margin (G)(%)
  • Mark Up (M)(%)

Sales Equations

  • P = R - C
  • M = P / C
  • G = P / R

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.



 

Cite this content, page or calculator as:

Furey, Edward "List Price Markdown Calculator"; from http://www.calculatorsoup.com - Online Calculator Resource.

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