List Price Markdown Calculator
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%
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/$40).
Checking the result
- Markdown = 50 x 20% = 10
- Revenue = List Price - Markdown = 50 - 10 = 40
- Gross Profit = Revenue - Cost = 40 - 10 = 30
- Gross Margin = Gross Profit / Revenue = 30 / 40 = 75%
To work without the markdown you can use our straight Sales Calculator.
- Cost (C)($)
- Revenue (R)($) or selling price
- Gross Profit (P)($)
- Gross Margin (G)(%)
- Mark Up (M)(%)
- 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" at https://www.calculatorsoup.com/calculators/financial/list-price-markdown-calculator.php from CalculatorSoup, https://www.calculatorsoup.com - Online Calculators