Markdown Cadence Calculator
The price path across a season, compounded.
Model a markdown schedule across a season and see the compounded price at each step, rather than adding the percentages.
Final price
$28.00
72.0% off in total
Markdowns compound rather than add. These steps leave 72.0% off, not 100.0% — a difference buyers consistently misjudge. A shallow markdown early usually recovers more cash than a deep one late, because the stock is still in season and still wanted.
How the Markdown Cadence Calculator works
Successive markdowns compound rather than add, and the difference is startling. A 20% then 30% then 50% schedule does not take the price to zero — it lands at 28% of the original, a 72% total reduction. Buyers who add the percentages consistently misjudge where a season ends up.
Also known as: markdown schedule calculator · markdown plan calculator
Markdowns compound, they do not add
Each markdown is taken off the current price, not the original. Twenty percent off leaves 80%; thirty percent off that leaves 56%; fifty percent off that leaves 28%. The total reduction is 72%, not the 100% that adding the three percentages suggests.
The error runs in the direction of overestimating the damage, so it usually shows up as buyers refusing a final markdown that would in fact still leave a quarter of the ticket price. It is worth doing the arithmetic before deciding a schedule is unaffordable.
The same compounding is why a sequence of shallow markdowns can land close to a single deep one: 20, 20 and 20 leaves 51% of the price, which is barely different from a single 50%.
A worked example
A 100 garment on a 20% / 30% / 50% cadence at weeks 6, 10 and 14. After week 6 it is 80; after week 10 it is 56; after week 14 it is 28. Total reduction 72%.
Against a cost of 20, that final price still returns 8 — a positive margin. A buyer who added the percentages and concluded the third markdown would take the price below cost would have held stock into the next season instead, which is almost always worse.
Where the answer misleads
Timing matters more than depth, and the model does not capture it. A shallow markdown in week six on stock that is behind plan usually recovers more cash than a deep one in week twelve, because the item is still in season and still wanted. The cadence is the whole strategy; the percentages are details within it.
Deep first markdowns also train customers. A retailer known for cutting 40% at the first sign of slowness finds full-price selling gets harder each season, which is a cost the price path cannot show.
Finally, this models one item. Real markdown decisions are taken across a range where some lines subsidise others, and the useful question is usually which stock to mark down rather than how deeply.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
Do markdowns add or compound?
They compound. Twenty percent off, then thirty off the new price, then fifty off that, leaves 0.8 × 0.7 × 0.5 of the original — 28%. Adding the percentages would suggest nothing was left, which is a substantial misreading.
When should the first markdown happen?
Earlier than instinct suggests. A shallow markdown in week six on stock that is behind plan usually recovers more cash than a deep one in week twelve, because the stock is still in season and still wanted.
How deep should each step be?
Enough to move the stock without giving away more than needed. Common cadences run 20 to 30% for a first markdown, then similar increments. Very deep first markdowns train customers to wait.
How does this affect maintained markup?
Directly — every step comes straight off realised retail. Modelling the cadence against a sell-through assumption is how you find out whether the season's planned margin survives, before it is committed rather than after.