1. What is Retail Markdown?

A retail markdown is a reduction in the original selling price of merchandise. It's commonly used to clear inventory, promote sales, or respond to market competition.

2. How Does the Calculator Work?

The calculator uses the retail markdown formula:

Where:

• \( \text{Retail Original} \) — Original price before markdown (USD)
• \( \% \) — Percentage markdown (0-100%)

Explanation: The formula calculates the final sale price by reducing the original price by the specified percentage.

3. Importance of Markdown Calculation

Details: Accurate markdown calculations are essential for inventory management, profit planning, and maintaining competitive pricing strategies.

4. Using the Calculator

Tips: Enter the original price in USD and the markdown percentage (0-100). Both values must be valid (price > 0, percentage between 0-100).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between markdown and discount?
A: Markdown refers to permanent price reductions by retailers, while discounts are typically temporary promotions.

Q2: How do markdowns affect profit margins?
A: Markdowns reduce profit margins but can increase overall revenue by moving more inventory.

Q3: When should retailers use markdowns?
A: Common times include end-of-season clearance, overstock situations, or when introducing new product lines.

Q4: Are there optimal markdown percentages?
A: Optimal percentages vary by industry and product, but typically range from 10-50% depending on inventory goals.

Q5: How do markdowns impact inventory turnover?
A: Strategic markdowns can significantly improve inventory turnover rates by clearing slow-moving items.