Markdown and discount both reduce the price of a product, but they are often used in slightly different ways. A discount is a price reduction offered to the buyer, while a markdown is commonly used in retail to reduce the listed selling price, often to clear inventory or adjust pricing.
Use the calculator to check your own numbers, then read the guide for formulas, examples, and common mistakes.
What Is a Discount?
A discount is a reduction from the original price.
It may be shown as a percentage off, a flat amount off, a coupon, or a promotional offer.
For example, 20% off a 100 item gives a discount amount of 20 and a sale price of 80.
What Is a Markdown?
A markdown is a reduction in the listed selling price of an item.
Retailers often use markdowns to clear old stock, match demand, reduce slow-moving inventory, or create a sale price.
For example, if a product was originally listed at 120 and is marked down to 90, the markdown amount is 30.
Markdown vs Discount in Simple Terms
A discount often describes the saving offered to the customer.
A markdown often describes the seller reducing the listed price.
In simple calculations, both can be handled in a similar way because both reduce the original price.
Markdown Amount Formula
The markdown amount formula is: markdown amount = original price - new price.
If the original price is 150 and the new price is 110, the markdown amount is 40.
This shows how much the price was reduced.
Markdown Percentage Formula
The markdown percentage formula is: markdown percentage = markdown amount ÷ original price × 100.
If the markdown amount is 40 and the original price is 150, the markdown percentage is 40 ÷ 150 × 100.
The result is 26.67%.
Discount Formula
The discount formula is: discount amount = original price × discount percentage ÷ 100.
After finding the discount amount, subtract it from the original price to find the sale price.
For the complete guide, read Discount Formula.
Example: Markdown Calculation
Suppose a jacket was originally 200 and is marked down to 150.
The markdown amount is 200 - 150, which equals 50.
The markdown percentage is 50 ÷ 200 × 100, which equals 25%.
Example: Discount Calculation
Suppose the same jacket has 25% off from an original price of 200.
The discount amount is 200 × 25 ÷ 100, which equals 50.
The sale price is 200 - 50, which equals 150.
Business Impact of Markdowns and Discounts
Markdowns and discounts can help sell products faster, but they can also reduce profit margin.
If costs stay the same while price drops, the profit from each sale usually becomes smaller.
For the business side, read How Discounts Affect Profit Margin.
Use the Calculator
Use the Discount Calculator when you know the original price and percentage off.
If you know the original price and the new marked-down price, subtract the new price from the original price to find the markdown amount.
For comparing different offers, read How to Compare Discounts.
Conclusion
Markdown and discount both reduce price, but they are often used from different points of view.
A discount usually describes the saving offered to the buyer. A markdown usually describes the seller reducing the listed price. In both cases, the key numbers are original price, reduction amount, and final sale price.
Related guides and tools
FAQs
Is markdown the same as discount?
They are closely related, but markdown usually refers to reducing the listed price, while discount often refers to the saving offered to the buyer.
How do I calculate markdown amount?
Subtract the new price from the original price.
How do I calculate markdown percentage?
Divide the markdown amount by the original price, then multiply by 100.