1. What is Markdown?

Markdown is the difference between the original price of an item and its reduced sale price. It represents the amount by which the price has been decreased.

2. How Does the Calculator Work?

The calculator uses the simple markdown formula:

Where:

• Original Price — The initial price of the item before reduction
• New Price — The reduced price of the item

Explanation: The calculation shows the absolute dollar amount by which the price has been reduced.

3. Importance of Markdown Calculation

Details: Calculating markdown helps businesses track pricing strategies, measure the impact of sales promotions, and analyze inventory management effectiveness.

4. Using the Calculator

Tips: Enter the original price and new price in USD. Both values must be positive numbers, and the new price should be less than or equal to the original price.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between markdown and discount?
A: Markdown is the absolute dollar amount reduced, while discount is the percentage reduction from the original price.

Q2: Can markdown be negative?
A: No, markdown is always zero or positive. If new price is higher than original, it's a markup, not markdown.

Q3: How is markdown percentage calculated?
A: Markdown percentage = (Markdown Amount / Original Price) × 100

Q4: Why do retailers use markdowns?
A: To clear inventory, attract customers, compete with other retailers, or sell seasonal items before they become obsolete.

Q5: What's a typical markdown strategy?
A: Many retailers use progressive markdowns - starting with small reductions and increasing them if items don't sell.