The idea in one line. A markdown is not a sales tactic. It is the price the business pays for being wrong — about depth, timing or price — and the earlier you admit it, the cheaper it is.
Two kinds. PLANNED PROMOTION: a price event decided in the plan — seasonal sale, mid-season event; budgeted, timed, with a target sell-through. REACTIVE MARKDOWN: a price cut forced by stock that did not move; unplanned, margin-destroying, and a signal that the buy was wrong. Reporting mixes them; the merchandiser must not.
The arithmetic. A style bought at 40 and priced at 100 makes 60 per unit at full price. At 30% off it makes 30 — half the margin for the same cost, the same space, the same handling. And the first markdown teaches the customer to wait for the next.
Timing. The first markdown is the cheapest: taken early, it clears at 20–30% off; taken late, it needs 50–70%. Markdown money is like medicine — the dose grows with delay. That is why sell-through by week of life matters: it tells you in which week the product stops earning its full price.
Why it matters. Markdown rate — the share of sales taken below full price — is the single number that separates a well-bought range from a badly bought one with good revenue. Two shops can post the same sales; the one with a 40% markdown rate bought twice the risk.
The trap. Treating markdown as the fault of the sales floor ("they did not push it"). Markdown is born in the buy: too deep, too late, mispriced. The floor only reveals it.
The bridge. A fad you classified in Trend/Fad/Classic and still bought deep will arrive here in week six. The Source Card written before the buy is the evidence you need to decide whether the miss was information or judgement.
Practice. Take one past season. Split the markdown into planned and reactive. For each reactive line, write which of the three was wrong — depth, timing, price — and what data available before the buy would have said so.