Markdown to Target Margin Calculator

About this calculator

Retailers need to know how far they can discount an item before a sale stops being profitable. This calculator works backward from a target profit margin on cost to find the floor selling price — the lowest price that still delivers that margin — then expresses the gap between the original price and that floor as the maximum safe discount percentage.

Because margin is measured against cost rather than against the discounted selling price, the math isn't simply “target margin minus current margin”: as price drops toward cost, the same dollar markdown represents a shrinking margin percentage, so retailers use this floor-price approach — rather than eyeballing a discount — to make sure a markdown, flash sale, or clearance event doesn't quietly erode below the margin needed to cover overhead and stay profitable.