How To Guide:
Markdown

 
 

USING the flourish markdown calculator to
make profitable decisions for YOur business



1. using your calculator

 

CURRENT

Select your Sales Platform & Transaction Fees.
Select VAT (Sales Tax) if applicable. You can also change the % if needed*.
Input your Selling Price, Postage Fees & Cost Price from your Pricing Calculator or Range Plan.
Select your Overhead Type (% or Fixed Price) and input the amount
(e.g. 17 = 17% or £17).

You have calculated your Profit Value and Margin %.

Input the number of Stock Units you are marking down
(if applicable) and your Stock Value is calculated.

Screen Shot 2018-10-22 at 15.04.58.png

*For this example, there is no VAT included.

 

PROPOSED MARKDOWN

Select your Markdown Type, Permanent or Promotional.
Forgotten which is which? The Markdown Insight can help you.

Choose your Discount Type (Money Off (£$€) or % Off) and input the amount (e.g. 20 = 20% or £20).

Selected a promotional markdown?
Add the number of units you expect to sell while the promotion is running
(Forecasted Sales).

 
Screen Shot 2018-10-22 at 15.05.05.png
 
 

NEW

Ta da!
 You have your new Selling Price, Profit Value, and Margin %.

Stock Value & Markdown Spend is calculated based on your chosen Markdown Type:

PERMANENT:
The stock is permanently reduced, reducing the value and instantly spending markdown.

PROMOTIONAL:
Stock value only reduces when you sell a product.
Your forecasted sales units will calculate your new Stock Value & Markdown Spend.

 
Screen Shot 2018-10-22 at 15.05.05.png
 
 

PROMOTIONAL PERFORMANCE

Selected a promotional markdown?
See the Sales, Profit Value & Margin % you can expect
to make, based on your forecasted sales units.

 
Screen Shot 2018-10-22 at 15.05.05.png
 

Back to Quick Guide


2. profit VS. discount

Your calculator shows you what your Profit Value and Margin % will be after your markdown.

Ideally, you don't want to lose money.
You should always aim to be profit neutral (at 0%),
like the example below, or profit positive (over 0%).

Screen Shot 2018-10-22 at 15.15.39.png

Use your calculator to compare the same product with a DIFFERENT discount:

20% off, Profit Value & Margin % = £0 /0%
15% off, Profit Value & Margin % = £4.26 /+6%
10% off, Profit Value & Margin % = £8.11 /+11%

Screen Shot 2018-10-22 at 15.19.20.png

Forecasted sales of 30 units at 20% markdown?
You may sell less at 15% or 10%.

Consider the reason for the markdown
(e.g. clearing stock or driving sales),
as well as the discount.


Back to Quick Guide


3. promotional sales & profit

Question:
Can you offer a higher discount to your customers
AND make more sales and profit?

Answer:
Yes, you can.
Let's look at the example below.


I predict that my £100 product will sell:

10 units @ Full Price (i.e. £100) = £1,000 Sales, £306 Profit
20 units @ 10% discount (i.e. £90) = £1,800 Sales, £422 Profit
40 units @ 20% discount (i.e. £80) = £3,200 Sales, £465 Profit
75 units @ 25% discount (i.e. £75) = £4,500 Sales, £481 Profit

What is the best option?
The 25% discount.

But what if I only sold 50 units at 25% discount?
Then I would make £3,750 Sales, £344 Profit.

The best option?
If profit is my primary objective, it is now the 20% discount.
If I'm after sales value, it's still the 25%.

You have multiple calculation rows to help you make the right decision for YOUR business.

Screen Shot 2018-10-22 at 15.24.29.png


4. profit across platforms


Selling across more than one platform?

Use your Calculator to check your profit and margin, then
decide where and how to sell your products.


I am discounting my £100 product by 20%.
I look at the Profit Value across each of my Selling Platforms:

Etsy = £465 Profit
Amazon = £246 Profit
eBay = £306 Profit
NOTHS = -£170 Profit

The best option?
Selling on Etsy.

Eek.
Selling on NOTHS will mean my profit is negative.
What could I do?

Reduce the discount %, move your stock to another platform,
or take a hit on profit to clear your products.

Screen Shot 2018-10-22 at 15.29.11.png

now go forth & calculate!