# Apparel Gross Margin Calculator

> Work out a fashion buy’s gross margin after markdowns from units bought, landed cost, full price, sell-through at full and reduced price, and markdown depth.

Category: Textile & apparel · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/apparel-gross-margin-calculator

Fashion margin is planned at the initial markup but realised after markdowns. Enter how much of the buy sells at full price and how much on markdown to see the margin you actually keep.

Also called: Fashion margin calculator, Maintained margin calculator.

## Inputs
- Units bought (default 1000)
- Landed cost per unit (default 12)
- Full selling price (excl. sales tax) (default 40)
- Sold at full price (unit % of units; default 60)
- Sold on markdown (unit % of units; default 30; optional)
- Average markdown (unit % off; default 40; optional)
- Unsold stock (options: Keep as stock, Write off; default inventory)
- Currency

## Results
- Gross margin
- Gross margin amount
- Net sales
- Cost of goods sold
- Initial markup (on price)
- Markdown cost
- Sell-through
- Unsold units

## Formula

```
Sales = Full units × Price + Markdown units × Price × (1 − Markdown%);  COGS = Units sold (or all units if written off) × Cost;  GM% = (Sales − COGS) ÷ Sales
```

Where:
- IMU: initial markup on retail: (Price − Cost) ÷ Price
- Sell-through: share of units bought that sold

## Worked example
1. Full price: 600 × 40 = 24,000. Markdown: 300 × 24 = 7,200. Sales = 31,200.
2. COGS = 900 sold × 12 = 10,800.
3. Gross margin = 20,400 ÷ 31,200 = 65.38%, against an initial markup of 70%.

**Result:** Markdowns cut the margin from a 70% initial markup to 65.4% realised, with 100 units left in stock.

## What the result means

The gap between initial markup and realised margin is the cost of markdowns. Writing off unsold stock shows the margin if the leftovers have no value.

## Assumptions and limits
- Prices and sales exclude VAT or sales tax.
- All markdown sales are at the one average markdown.
- Returns, shrinkage, promotions and staff discounts are not included.

## Questions

### What is the difference between markup and margin?

Markup is profit over cost; margin is profit over price. Fashion retailers usually quote markup on retail, which is the same calculation as margin.

### Why keep unsold stock as inventory?

Under standard accounting, unsold units stay on the balance sheet at cost until sold or written down, so they are not in COGS.

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Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/apparel-gross-margin-calculator