Use this markdown calculator to determine the new list price of your product. Enter the initial price and markdown % to calculate the new price.

## Markdown Formula

The markdown formula is very similar to the formula for markup. The list price of an item can be calculated as follows.

NP = OP – (OP*MD/100)

• Where NP is the new price
• OP is the original price
• MD is the markdown %

## Markdown Definition

Markdown is defined as a ratio or percentage of a price that is reduced to a new lower price.

## How to calculate Markdown

Let’s take a look at an example of how to use markdown in the real world.

Let’s assume you have a product that currently sells for \$100.00. This product has not been selling as well as hoped for. As a result, you are looking to decrease the price to increase sales.

To do this, you are going to apply a markdown to that item. After some math, you’ve determined that a 5% decrease is a good place to start.

Next, you need to plug in the original price, and markdown % into the formula, or just simply use the calculator. This should yield a new price of \$95.00.

That means the total decrease due to the markdown was \$5.00.

To determine if this decrease will yield an increase in profit, you should visit our price elasticity of demand calculator.

This is an evaluation of how a change in price affects the change in total revenue and profit due to the change in demand.

## FAQ

What is markdown?

Markdown, is the opposite of markup. In other words, it’s the percentage reduction in the price of a good or service.