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Planned markdown calculator

Too many small businesses use a very simple plan in determining the margins of their merchandise. They simply look at the cost and then apply a multiplier factor to the cost to determine the selling price.

As the merchandise ages, they begin to randomly take markdowns in an effort to get rid of the merchandise. If the buyer were to calculate the maintained gross margin when all of the merchandise has been sold, they would likely be surprised at what their margin was. The surprise may be how high of a margin they maintained as well as it could be a surprise as to how low it was; but either way, in most cases they are surprised.

This calculator is created to resolve that. Sophisticated buyers do not settle for looking at their initial margin; they have a plan as to when, with how many on hand, and by how much to mark merchandise down. This is exactly how this calculator works. It allows you to plan for four markdowns over the season of an item. By determining how long the merchandise will be sold at full price, you will then decide when, how many, and by how much the merchandise will be discounted.

Proceed with this calculation for up to four periods, and this calculator will tell you what your maintained margin will be for the entire season of the product. This is a much better way than just guessing as you go through the season, and it is likely that you will end the season with less of the inventory on hand, and with fewer markdowns.

Planned markdown calculator from Profits Plus
       
Yellow indicates squares where info is entered      
       
Inventory Purchase Amount    
Inventory Balance Remaining @ End of Period 1    
Inventory Balance Remaining @ End of Period 2    
Inventory Balance Remaining @ End of Period 3    
Inventory Balance Remaining @ End of Period 4    
       
       
Inventory Sold During Period 1    
Inventory Sold During Period 2    
Inventory Sold During Period 3    
Inventory Sold During Period 4    
       
       
Gross Margin % (original)    
       
       
Discount (% of Retail) Offered in Period 1    
Discount (% of Retail) Offered in Period 2    
Discount (% of Retail) Offered in Period 3    
Discount (% of Retail) Offered in Period 4    
       
       
Gross Margin % (Net of Discount) in Period 1    
Gross Margin % (Net of Discount) in Period 2    
Gross Margin % (Net of Discount) in Period 3    
Gross Margin % (Net of Discount) in Period 4    
       
       
Sales in Period 1 (before discount)    
Sales in Period 2 (before discount)    
Sales in Period 3 (before discount)    
Sales in Period 4 (before discount)    
TOTAL Sales    
       
Sales in Period 1 (net of discount)    
Sales in Period 2 (net of discount)    
Sales in Period 3 (net of discount)    
Sales in Period 4 (net of discount)    
TOTAL Sales    
       
Amount of Discount in Period 1    
Amount of Discount in Period 2    
Amount of Discount in Period 3    
Amount of Discount in Period 4    
TOTAL Amount of Discount    
       
Gross Margin Dollars in Period 1    
Gross Margin Dollars in Period 2    
Gross Margin Dollars in Period 3    
Gross Margin Dollars in Period 4    
TOTAL Gross Margin Dollars    
       
TOTAL Gross Margin % (based on retail)    
TOTAL Discount % (based on retail)    
       
       
Check total for period 1    
Check total for period 2    
Check total for period 3    
Check total for period 4    
       
       
       

PROFITS PLUS, FOUNDER OF...

 

©1998-2026 Profits Plus Solutions, Inc.
Tom Shay
PO Box 128
Dardanelle, AR 72834
(727)823-7205

MARCH 2026
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Small Business

AdvisoriES


Every time I see the logo for Target stores, I think about small businesses and the need to know which people to target as their customers. Of course, of most importance is the person who has spent any money with your business.

 

I ask businesses if they know how much the average person spends with their business. Most offer a quick response with a dollar amount. That answer is incorrect as they are telling me what the average existing customer is spending. The average person in any community spends no money with that small business.

 

Looking for new customers without any plan of how to do so is just spending money. That is why every small business needs to know how to find and use information. Find ideas in the March Small Business Advisory.

Small Business

NewS

Top Story

Employee retention; is it important? Or is it easier to lose an employee and wait for the next applicant to walk in the door? The Small Business News for March shares some statistics of the expense you incur when you make the change instead of working to retain a current employee.

Article of the Month

It is baseball season and we use the sport as an explanation of the cost of growing your business. In Boston's Fenway Park, left field has a wall that is know as the green monster.

 

And that is what growing your business is - a monster! You can't successfully grow your business without a plan and knowing you will have the cash on hand to pay for the growth.


Book of the Month

Are you selling something or persuading the customer? With your employees are you repeatedly telling that employee or are you persuading them to excel?

 

Influence: The Psychology of Persuasion by Robert Ciaidini is our suggested book for March 2026. Most definitely an appropriate read.

All this plus the Internet Tool for Your Business and a staff incentive idea for your business.
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BOOK US

With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.

Small Business

Advisories

Every time I see the logo for Target stores, I think about small businesses and the need to know which people to target as their customers. Of course, of most importance is the person who has spent any money with your business.

 

I ask businesses if they know how much the average person spends with their business. Most offer a quick response with a dollar amount. That answer is incorrect as they are telling me what the average existing customer is spending. The average person in any community spends no money with that small business.

 

Looking for new customers without any plan of how to do so is just spending money. That is why every small business needs to know how to find and use information. Find ideas in the March Small Business Advisory.

Small Business

News

 

Top Story

Employee retention; is it important? Or is it easier to lose an employee and wait for the next applicant to walk in the door? The Small Business News for March shares some statistics of the expense you incur when you make the change instead of working to retain a current employee.


Article of the Month

It is baseball season and we use the sport as an explanation of the cost of growing your business. In Boston's Fenway Park, left field has a wall that is know as the green monster.

 

And that is what growing your business is - a monster! You can't successfully grow your business without a plan and knowing you will have the cash on hand to pay for the growth.


Book of the Month

Are you selling something or persuading the customer? With your employees are you repeatedly telling that employee or are you persuading them to excel?

 

Influence: The Psychology of Persuasion by Robert Ciaidini is our suggested book for March 2026. Most definitely an appropriate read.

 

All this plus the Internet Tool for Your Business and a staff incentive idea for your business.