Markdowns and GMROI

Markdowns show how much was cut from prices to clear stock. GMROI shows the margin earned for every dollar sitting in inventory.

About 5–10 minutes · no sign-up needed

The idea

Markdowns show how much was cut from prices to clear stock. GMROI shows the margin earned for every dollar sitting in inventory:

Gross margin ÷ Avg inventory

Markdown %Markdowns ÷ Sales × 100. High markdowns mean too much stock, or the wrong stock.

GMROIGross margin $ ÷ Average inventory at cost.

Over 1 is healthyEach dollar of stock earned more than a dollar of margin. Under 1 is a warning.

GMROI is how buyers and planners decide which categories deserve more money and space.

Try each one in your head first, then open the answer.

1. What is the markdown % for Chargers?

$1,500 ÷ $15,000 × 100 = 10%

2. Your report compares GMROI across the five categories. Which visual?

Bar chart

3. What is the GMROI for Cases?

$12,000 ÷ $4,000 = 3.0

4. Power banks have 20% markdowns and a GMROI of 0.5. What's the best next step?

Buy less next season, and clear the extra stock now

Learn it by doing. This lesson is a short hands-on level on Bampaa: see it work, then build and write it yourself, with instant feedback.

About 5–10 minutes · no sign-up needed