A markdown is a reduction from the planned retail price, taken to move stock that is not selling quickly enough at full price.
Oct 5, 2026
The retailer takes the markdown, but the cost is often shared. A brand wanting to protect a key account will contribute markdown money, a credit against the difference, in exchange for the account continuing to buy the line next season.
Those contributions are rarely in the original terms and almost always negotiated afterwards, which is why brands who have not planned for them discover their real season margin only once the season is over.
Full-price sell-through is the number that matters, not total sell-through. A style reaching 80 per cent only after two markdowns has not performed, it has been cleared, and the multiplier the buyer planned against did not survive.
Markdown is also a market signal. Early and deep discounting across a whole category usually means everyone bought it too heavily, which is a reason to cut next season’s buy rather than to chase the same product at a better price.
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