Markdown Optimizer

A sequence of end-of-season steps, depth and trigger week, with the trade-off between sales margin and residual stock laid out plainly.

Stock and price

The calculation runs ex-VAT: cost price, residual value and holding cost are to be entered ex-VAT. A VAT-inclusive price is brought back to ex-VAT using the VAT rate above. Use a point for decimals, e.g. 1.5.

Residual value: what is recovered on a unit left unsold at the end of the window, destruction, clearance channel or carry-over to next season.

Window and pace

The window runs from 4 to 20 weeks. The season end date only dates the steps and changes no calculation.

Sensitivity observed at previous seasons' markdown steps, negative value. At -2, a depth of 30% multiplies the rate of sale by 2.04. Minus sign allowed.

At 0, the rate of sale stays constant over the window. At 5%, it loses 5% of the previous week each week, before any effect of markdown.

Constraints

The number of steps is a ceiling: the selected sequence uses fewer if that serves the result. Depths are strictly increasing from one step to the next.

Entries stay in the browser and disappear when the tab is closed.

Net result of the sequence
€0
Residual stock
0
0%
Markdown budget
€0
reading

The selected schedule

Selected sequence, one row per step: trigger week, date, depth, applied price and units sold on the step
Step Week Date Depth Applied price ex-VAT Units sold

The trade-off, margin against sell-through

From the sequence most conservative on margin to the most aggressive on sell-through. Each row is the sequence with the highest net result at its level of residual stock: the compromise is read here, not settled here.

Alternative sequences, with realised markdown rate, sales margin, residual stock and net result
Sequence Markdown rate Sales margin Residual stock Share of stock Net result Reading

The cost of a late first step

Net result gap
€0
Markdown rate gap
0 points
Residual stock gap
0

Stock trajectory

What this calculation does not say
1. The rate of sale is the basis of the whole projection, yet it is measured on stock whose sizes and colours no longer represent early-season demand.
2. Stock is treated in aggregate: a residual concentrated in extreme sizes does not follow the calculated rate, whatever depth is applied.
3. Competitor markdowns stay outside the model: a player breaking price a week earlier empties the clearance window the schedule rests on.
4. Residual value arrives as an input: destruction, clearance channel and carry-over to next season carry neither the same net value nor the same cost.