Retail operations
Markdown margin impact.
Enter regular price, unit cost and one or two markdown steps. See the new price, margin and the units you must sell to match full-price gross profit.
Units needed = full-price gross profit / new profit per unit. Cutting a $60 item with a $30 cost by 25% leaves $15 a unit, so you must sell 200 instead of 100 just to break even on profit.
Your numbers
Result
Worked example
An item prices at $60 and costs $30, so each sale earns $30 at a 50% margin. Selling 100 gives $3,000 of gross profit. A 25% markdown brings the price to $45: profit per unit falls to $15 (33.33% margin), so you need 200 units, a 100% lift. A second 20% markdown off the sale price gives $36, which is 40.00% off the original, with $6 profit a unit; matching $3,000 then takes 500 units, a 400% lift.
How it works
New price = regular price x (1 - markdown %). A second step is taken off the first sale price, not the original, so 25% then 20% is 40% off in total, not 45%.
Units needed = (regular price - cost) x regular units / (new price - cost). The percentage lift is that figure divided by your regular units, less one. The deeper the cut relative to margin, the faster the required lift grows, and if the new price falls to cost or below no number of units earns the same profit.
This is a profit-matching test, not a forecast. It does not know how many units a markdown will actually move, so compare the required lift with what past markdowns of yours delivered. Markdown timing matters too: the tool shows each step separately so you can decide whether the second one is worth taking.
Sources and basis (checked 2026-10-08): Arithmetic on your inputs only. Break-even units follow from equating gross profit at the regular price with gross profit at the marked-down price.
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FAQ
How many more units do I need to sell after a discount?
Divide the gross profit you would have made at full price by the new profit per unit. The calculator does this for one or two markdown steps.
Is 40% off the same as two markdowns of 20%?
No. Two 20% markdowns compound to 36% off. The second percentage applies to the already reduced price.
When is a markdown still worth it?
When the profit per unit stays above zero and you expect enough extra units, or when the stock would otherwise sit unsold and tie up cash. Compare the required lift with your past results.