Terms of Trade · Edition 2: The trading pack
Markdown
Definition
The reduction from the original selling price taken to clear stock, measured as the value given away in a period or as a share of the original retail value of what was sold. It is the cost of the gap between what was bought and what the customer bought.
Field note
Markdown is the measure of how inaccurate the business forecasting is.
Board question
What was the markdown cost last season, and who signed off the buy it paid for?
Applied through
Commercial Discipline in the Cat’s Whiskers, money in the right places for the right reasons; sell-through is the number that predicts it.
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