List Price Markdown Calculator

List Price Markdown

Values you know:

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

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 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)

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.