MARKDOWN % VS PERCENT MARKED OFF AN ITEM

RICS and most of the retail industry define the “Markdown %” as “Markdown dollars divided by Sales.”

The Markdown % is calculated as the dollar markdown divided by the NET retail sales price (times 100).

For example, an item selling for $30 is marked down and sold for $24. The Markdown % is 25% ($6.00/$24.00).

This can be confusing because the markdown is seen as 20% off the original price at the POS, but POS markdown and Markdown % are really two different terms and calculated differently.

 

 

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