# 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.

**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)*.

**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.

**PROMOTIONAL PERFORMANCE**

Selected a promotional markdown?

See the Sales, Profit Value & Margin % you can expect

to make, based on your forecasted sales units.

*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%).

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%

*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.*

### 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.

### 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.