# List Price Markdown Calculator

## 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.