List Price Markdown Calculator

Calculator Use

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%
• Calculate

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.

Sales Variables

• Cost (C)($)
• Revenue (R)($) or selling price
• Gross Profit (P)($)
• Gross Margin (G)(%)
• Mark Up (M)(%)

Sales Equations

• 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.