A markdown is a permanent reduction from a product’s original or list price. Retailers use it to move slow inventory, respond to seasonality, or match competitors. It is usually written as a percentage off (for example 20% off) or a fixed dollar amount off the prior price, and unlike a temporary promotion, it typically resets the item’s selling price going forward.
How it works
You start from the reference price, the original or last regular price, and subtract the reduction. A $100 item with a 30% markdown sells for $70. Retailers track the markdown percentage against the original price to measure margin erosion and to plan future buying. Markdowns differ from discounts in intent: a discount is often short-term and buyer-specific, while a markdown is a lasting change to the price of the goods themselves.
Why it matters
Markdowns directly affect gross margin, so timing and depth matter. Take them too early and you give away margin you could have kept. Take them too late and you carry stock that ties up cash and shelf space. Many merchants use a markdown cadence, small reductions first, deeper cuts closer to end of season, to protect margin while still clearing units.
In B2B quoting on Shopify
In wholesale, a marked-down price often becomes the starting point for a negotiated quote. A buyer requesting a quantity may expect the current markdown to hold, then ask for further volume terms on top of it. When you build a quote, it helps to be explicit about which line is the marked-down base price and which is the account-specific adjustment, so the buyer sees a clean, honest number. Keeping that distinction clear also protects your margin math when you convert the quote into an order.
See related terms in the B2B quoting glossary, or review pricing for plan details.