Markdown Optimizer
First step on a fixed date, second a fortnight later, final step at season close: end-of-season markdown follows the trading calendar rather than the stock. Depth is decided by looking at what is left, the question of timing never having been asked. A late first step pushes the effort onto the later ones, at a deeper cumulative markdown.
The real trade-off sets two quantities against each other that nobody puts side by side: margin retained on what sells, and value lost on what remains. The internal debate runs between trading, who want to sell through, and finance, who want to protect the margin rate, with no shared figure between them; the calculation produces one.
Markdown Optimizer
How to read the result
What you enter
- Remaining units, current selling price and cost price
- Season end date and the clearance window available
- Observed rate of sale at the current price
- Price sensitivity seen at previous seasons' markdown steps
- Constraints: maximum depth, number of steps, stock holding cost
How to read the result
- Two dimensions to read the sequence: the depth of each step and its trigger date
- Margin retained against residual stock: the trade-off is laid out and left open
- A late first step is paid for at the later ones, in cumulative depth
- What comes out: the markdown calendar and the budget behind it
What the result does not tell you
- Response to the first step is extrapolated from current rate of sale, itself measured on stock whose sizes and colours no longer represent original demand.
- The reasoning runs on aggregate units. A residual concentrated in extreme sizes will not clear at the calculated rate, whatever depth is applied.
- Competitor markdowns are absent from the model. A player breaking price a week earlier empties the clearance window the whole calendar rests on.
- Residual stock value arrives as an input. Destruction, sale to a clearance channel and carry-over to next season carry neither the same net value nor the same cost.
The sequence assumes faithful execution in store. A step applied a week late changes the entire outcome.
A first thirty-minute conversation
Thirty minutes are enough to frame a retention, expansion or pricing issue, and see whether there is work to do together.