Markdown Strategy Optimizer
Stop guessing when to drop prices. This calculator finds the optimal markdown schedule that maximizes your total profit while freeing up capital faster.
The Markdown Dilemma
Markdown Psychology
Buyer Thresholds: Small 5% discounts rarely trigger purchases. Research shows meaningful price perception changes happen at 15%+ reductions. Either make it count or don't bother.
Anchoring Effect: Your original price sets the anchor. Buyers who see "$50, now $35" perceive more value than those who just see "$35". Use strategic markdowns, not immediate low pricing.
Category Matters: Fashion and seasonal items depreciate quickly—aggressive markdown after 30 days. Evergreen items (books, collectibles) can wait longer. Know your category's decay rate.
Common Questions
What is a markdown strategy?
A markdown strategy is a planned schedule of price reductions for items that aren't selling. Instead of randomly lowering prices, you calculate optimal timing and amounts based on holding costs, opportunity cost, and likelihood of sale at each price point.
When should I start marking down items?
It depends on your category and platform. Fashion typically needs markdowns after 30-60 days. Electronics after 14-30 days due to depreciation. Consider your storage costs, capital tied up, and sell-through expectations. This calculator helps find your optimal timeline.
How much should I markdown?
Small markdowns (5-10%) rarely change buyer behavior. Meaningful markdowns (15-30%) actually accelerate sales. However, you need to balance against your floor price. This tool calculates optimal markdown increments based on your margins.
What's the "time value of money" in reselling?
$100 today is worth more than $100 in 60 days. While that money sits in inventory, you can't reinvest it. If you normally earn 30% ROI per flip cycle, every month an item sits costs you potential returns. Sometimes a smaller profit now beats a larger profit later.
Related Tools
This calculator provides suggestions based on your inputs and general reselling principles. Actual sell-through depends on item condition, photos, descriptions, market demand, and timing. Use as a planning tool, not a guarantee.