Retail Markdown CalculatorFree online financial calculator — instant results, no sign-up
Calculate a reduced retail price and gross profit after a markdown.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Retail Markdown Calculator
The Retail Markdown Calculator shows how a percentage markdown changes an item's retail price and gross profit per unit. Enter the original retail price, markdown percentage, and unit cost to calculate the new selling price, price reduction, and amount left after covering unit cost.
- Original retail price ($)
- The item's selling price before the markdown, expressed in dollars, with a default of $100.
- Markdown (%)
- The percentage of the original retail price to subtract, entered as a percentage with a default of 25%.
- Unit cost ($)
- The cost of one item to the business, expressed in dollars, with a default of $45.
Formula and method
D = P × (m / 100); S = P − D = P × (1 − m / 100); G = S − C.
- POriginal retail price in dollars.
- mMarkdown percentage entered as a whole percentage value, such as 25 for 25%.
- CUnit cost in dollars.
- DPrice reduction in dollars.
- SNew selling price in dollars.
- GGross profit per unit in dollars.
Convert the markdown percentage to a decimal and multiply it by the original retail price to find the price reduction. Subtract that reduction from the original price, then subtract unit cost from the new selling price. With the default inputs, D = 100 × (25 / 100) = $25.00, S = 100 − 25 = $75.00, and G = 75 − 45 = $30.00.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Original retail price100 $
- Markdown25 %
- Unit cost45 $
Results
- New selling price$75.00
- Price reduction$25.00
- Gross profit per unit$30.00
How to use the Retail Markdown Calculator
- 1Enter the original retail price in dollars; the default is 100.
- 2Enter the markdown percentage; the default is 25, meaning 25% off the original retail price.
- 3Enter the cost of one item in dollars; the default is 45.
- 4Review the calculated new selling price, price reduction, and gross profit per unit.
- 5Adjust the markdown if needed and compare the resulting gross profit with your pricing requirements.
Reading your result
New selling price is the amount charged for one item after the markdown: $75.00 with the default inputs. Price reduction is the dollar amount removed from the original retail price: $25.00. Gross profit per unit is the new selling price minus unit cost: $30.00. A positive gross profit means the selling price exceeds unit cost; zero means it exactly covers unit cost; a negative result means the item sells below cost.
Limitations
This calculation applies one markdown to one item's original retail price and assumes unit cost stays unchanged. Use nonnegative prices and costs and a markdown between 0% and 100% for a conventional retail discount. Gross profit is not net profit: operating expenses, payment processing fees, taxes, shipping, and other costs are not separately deducted. The calculator does not forecast sales volume, inventory turnover, or whether a markdown will increase total profit. Monetary results are displayed to two decimal places; checkout rounding rules may differ.
Common questions
Does the 25% markdown apply to retail price or unit cost?+
It applies to the original retail price. With the default $100 retail price, the 25% markdown removes $25.00 and produces a $75.00 selling price; the $45 unit cost is used only to calculate gross profit.
Why is the default gross profit $30.00 rather than $75.00?+
The $75.00 selling price is revenue per unit, not profit. Subtracting the $45 unit cost leaves $30.00 in gross profit before other business expenses.
What markdown would bring the selling price down to unit cost?+
For a positive original retail price, the break-even markdown is m = 100 × (1 − C / P). With the default $100 original price and $45 unit cost, it is 55%. A larger markdown would produce a loss per unit before other expenses.
Can I add consecutive markdown percentages together?+
No. Consecutive markdowns apply to successively reduced prices, so their price factors multiply rather than their percentages simply adding. This calculator applies a single markdown to the original retail price.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
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Results are estimates for informational purposes and are not financial, medical or legal advice.