🤑 Markdown & Discounts

Everything you need to know about the logic behind the markdown & discounts metrics in Style Arcade

Charlotte avatar
Written by Charlotte
Updated over a week ago

Metric Definitions

  1. Markdown % = 1 - (sell price / RRP) all ex tax

  2. Total Markdown $ = [(RRP ex tax) x sales units after returns)]- sales after returns $. Which means it includes both discounts & markdowns.

  3. Markdown After Returns $ = [(RRP ex tax)-(sell price ex tax)] x markdown sales units after returns

  4. Discount After Returns $ = Total markdown $ - markdown $ after returns

    Note: for multi-currency channels, please refer to Question 3.

Markdowns & discounts in Style Arcade.

This article will explain how Style Arcade calculates markdowns & discounts. We’ll provide some working examples and answer your most frequently asked questions.

What is a markdown vs a discount?

A markdown is the difference between the RRP and the sell price.

Markdowns are normally permanent and identified by a % off label. Once a product is marked down it’s rarely put back to sell at it’s original RRP.

A discount is any additional reduction in price not driven by a markdown. This often comes from discount codes used by the customer at checkout. For example: sign up & get 10% off.

Here’s an examples of different product scenarios. Tax has been ignored for now.

Price status

RRP

Sell price

Sales $

Markdown

Discount

Product A

Full price

$100

$100

$80

Product B

Markdown

$100

$50

$50

Product C

Markdown

$100

$50

$45

Product D

Full price

$100

$50

$100

Product E

Full price

$100

$50

$80

What are the metrics associated with markdowns & discounts?

Note:

  • RRP, sell price, price status & markdown % are all based on the price of the product at the end of the time period analysed.

  • Markdown $, discount $, full price and markdown sales units are all calculated at the time the order is placed.

  1. RRP - original recommended retail price.

  2. Sell price - current price at which the product is selling or sold if in the past (markdown price).

  3. Price status - status (full price or markdown) of the price of the product.

  4. Markdown % - the % difference between the RRP and the sell price (exc tax).

  5. Total markdown $/% - the difference between (sales units after returns X RRP ex tax) and (sales after returns). This includes both markdowns & discounts.

  6. Markdown $ after returns - the value difference between the RRP and the sell price (exc tax).

  7. Discount $ after returns - the value difference between the RRP or sell price (if the product is marked down) and the sales generated from the order.

  8. Full price sales units - Sales units when the product’s price = RRP.

  9. Markdown sales units - Sales units when the product’s price = sell price.

Note: Full price & Markdown sales units + Markdown $ after returns & Discount $ after returns metrics are only available in the latest Shopify version.

Where can I see this data in Style Arcade?

The metrics can be added to the product images as shown below.

The full price product will have a markdown % of 0% because the RRP = sell price.

The markdown product has a markdown % of 30% because the difference between the RRP and the sell price = 30% (exc tax).

You can also analyse markdowns and discounts in rollups at an aggregate level.

You can analyse at any level of the hierarchy including category, brand and colour for example.

See example report below.

How are markdowns and discounts calculated?

Metric calculations

  1. RRP = direct from data source

  2. Sell price = direct from data source

  3. Price status

    1. Full Price = RRP ex tax - sell price ex tax = 0

    2. Markdown = RRP ex tax - sell price ex tax > 0

    3. Unknown = No sell price found in source data

  4. Markdown % = 1 - (sell price / RRP) all ex tax

  5. Total Markdown $ after returns = ((RRP ex tax) x sales units after returns))- sales $ after returns

  6. Markdown $ after returns = ((RRP ex tax)-(sell price ex tax)) x markdown sales units

  7. Discount $ after returns = Total markdown $ - markdown $

Note: Markdown $ after returns & discount $ after returns only available in Shopify latest version.

Product examples

Example 1: sales units after returns per product = 1.

Tax is ignored for simplicity of understanding.

Price status

RRP

Sell price

Total sales units after returns

FP sales units after returns

MD sales units after returns

Sales $

Markdown

Discount

Markdown $

Discount $

Total Markdown $

Product A

Full price

$100

$100

1

1

$80

$0

$20

$20

Product B

Markdown

$100

$50

1

1

$50

$50

$0

$50

Product C

Markdown

$100

$50

1

1

$45

$50

$5

$55

Example 2: sales units after returns per product > 1.

Tax is ignored for simplicity of understanding.

Note: The price status of a product is the closing status of the week but Style Arcade tracks the price status of each sale. This leads to products selling across both full price and markdown in one time period. Shown in product C below which had a discount applied on both the FP & MD sale.

Price status

RRP

Sell price

Total sales units after returns

FP sales units after returns

MD sales units after returns

Sales $

Markdown

Discount

Markdown $

Discount $

Total markdown $

Product A

Full price

$100

$100

2

2

$160

$0

$40

$40

Product B

Markdown

$100

$50

2

2

$100

$100

$0

$100

Product C

Markdown

$100

$50

2

1

1

$140

$50

$10

$60

Product C breakdown

Price status

RRP

Sell price

Total sales units after returns

FP sales units after returns

MD sales units after returns

Sales $

Markdown

Discount

Markdown $

Discount $

Total markdown $

Product C
Full price sale

Markdown

$100

$50

1

1

0

$95

$0

$5

$5

Product C Markdown sale

Markdown

$100

$50

1

0

1

$45

$50

$5

$55

FAQs

1. Why can I not always validate the markdown/discount data directly in Style Arcade?

Often discounts are attached to orders rather than individual products. Style Arcade reports on product level data not order level data.

2. Why is the markdown % metric not available in rollups?

Rollups is used to report on an aggregate level whereas the products page is designed to report at the product level. You can add the markdown % metric to a report in the list view of the products page. See below.

3. Why does the markdown $ not add up when I am in a total business/combined channel?

If you have channels that are in multiple currencies then the markdown $ will be the sum of the individual channels converted to the currency that is in the combined channel. The pricing of the combined channel however will be in one currency therefore the following calculation will not add up:

Markdown $ = ((RRP ex tax) x sales units after returns) - sales $ after returns

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