Retail Markdown Recovery Calculator

Method and assumptions

Markdown price = original price × (1 − markdown percentage). Unit gross dollars = markdown price − unit cost; gross margin divides this by markdown price. Inventory revenue assumes all entered units sell at that price. Markdown headroom = max(0, (original price − unit cost) ÷ original price), capped at 99.99%. A zero headroom means the entered ticket is already at or below cost. A full 100% discount is excluded because it produces no sale price for a margin ratio.

Worked example

A $50 ticket marked down 30% sells for $35. Against $28 unit cost, gross dollars are $7 and gross margin is 20%. Forty-five units would generate $1,575 revenue if all sold; the cost-recovery discount threshold is 44%.

How to use the result

A markdown below the break-even discount retains positive gross dollars under the entered cost basis. This does not include clearance labor, payment fees, prior markdowns, returns, or the value of unsold units.

Input meanings and limits

• Original ticket price: The price before the markdown.
• Unit cost: The cost basis you want the sale price to recover.
• Markdown from original ticket: Discount entered as a percentage of original ticket.
• Units available at this price: Used to estimate revenue if all listed units sell.

Inputs accept finite, nonnegative values in the displayed ranges; percentages are bounded to 0–100% (with 99.99% maximum where division by the remaining share is used), and whole-unit or month fields require integers. Currency figures are shown in USD for convenience; enter values in one consistent currency. This is a planning worksheet, not financial, legal, tax, or accounting advice.

Related calculators

Marketplace fee price floor calculator and Wholesale and retail tier margin calculator.