This page is for a buyer or retail planner who checks a style's own sales partway through its selling season and must decide whether to act now or wait. At work, a person can look at a sell-through percentage alone and guess whether a style is in trouble, without actually projecting the pace of sale forward against the weeks left to sell it. This lesson mainly teaches the decision flow: it works out, using Order A's own fixed shop price and a Fairway Stores checkpoint, exactly when a style's own pace of sale signals that it will not clear on its own before the season ends.
Fairway Stores buys Order A, 15,000 T-shirts, wholesale from Northline Apparel and plans to sell them across a 10-week selling season in its own shops. Partway through, at the week 5 checkpoint, a buyer must read the numbers and decide whether to hold at full price a while longer or take the first markdown now. Without this skill, a buyer either reacts too early, cutting price on a style that would still have cleared on its own, or too late, once the style has already become terminal stock.
You need: no previous lesson. This is the first lesson of Course 4.
By the end of this lesson you can:
Not covered here: how deep a markdown should be and how it should be phased, and how a promotion differs from a markdown, both covered in the next lesson of this course (lesson T20-C04-L02).
| Term | Meaning |
|---|---|
| Markdown | A reduction in the shop price of goods that have not sold as forecast, used to clear the remaining stock. |
| Sell-through rate | The share of stock actually sold within a planned period, used to judge whether a forecast was right. |
| Stock cover | The number of weeks a brand's current stock is expected to last before it runs out, given its normal sales rate. |
| Forecast | A company's own estimate of what it expects to sell, used to decide how much to produce before any specific sale exists. |
| Replenishment cycle | One repeating round of Make to Stock production, run against a forecast rather than a single confirmed order. |
A buyer does not decide a style needs a markdown from its sell-through percentage alone, because a style can be behind an even, straight-line plan and still clear in time if its own sales pace picks up later, or it can be close to plan and still fail to clear if too few weeks remain. The decision instead compares two things: how many weeks it would take to sell the remaining stock at the pace already seen, and how many selling weeks are actually left before the season ends.
A buyer meets several shapes of this decision across a normal working year, and each depends on how the order was booked and how long its own selling season runs.
| What can differ | The shapes you will meet | Why it matters |
|---|---|---|
| Export order, hybrid pre-booked and replenishment | Order A's own 15,000 pieces are checked at a fixed midpoint against a planned sell-through curve, and the remaining replenishment can still be trimmed if the pace stays weak. | A hybrid order gives a buyer a second lever, cutting future replenishment, alongside the markdown decision on stock already delivered. |
| Domestic Make to Stock style bought against a standing forecast | A domestic buyer such as Cedar & Co. checks a style's own stock cover against the weeks remaining in its own selling life, since there is no later replenishment shipment to trim. | A pure Make to Stock style carries the whole markdown decision on the stock already on the shelf, with no upstream order left to adjust. |
| Short, fast-moving selling season | A style with only a 6-week season must check its own pace of sale as early as week 2 or 3, since little time remains to react by the midpoint. | Waiting for a midpoint checkpoint on a short season can leave too few weeks left to recover if the projection already shows a shortfall. |
| A basic style restocked from a rolling standing forecast | A core style with its own continuous replenishment cycle, sold steadily rather than cleared once per season, rarely needs this decision, since it is restocked rather than run down to zero. | Not every style passes through a single selling season; a rolling replenishment style is judged by its own stock cover, not by a markdown trigger. |
Fairway Stores plans to sell all 15,000 pieces of Order A across a 10-week selling season, with a planned target of 50% sold by the week 5 midpoint. At week 5, only 4,500 pieces have actually sold, 30% of the order, against the planned 7,500 pieces. The remaining 10,500 pieces have sold at an average pace of 900 pieces a week across the first five weeks.
The projected 11.7 weeks needed to clear the remaining stock is more than double the 5 selling weeks actually left. At the current pace, Order A will not clear before the season ends, which is the signal that triggers a first markdown now rather than a wait to see if the pace improves on its own.
The methodA common mistake is looking only at how far a style sits behind its planned sell-through percentage and assuming a small gap means no action is needed yet. What this costs a buyer who gets it wrong is time: a style with only a small percentage gap but very few selling weeks left can still fail to clear, while a style with a larger gap but many weeks still ahead can recover on its own without any price cut at all. The projection against the weeks remaining, not the size of the gap by itself, is what actually decides the case.
A style needs a markdown once its own current pace of sale would take longer to clear the remaining stock than the weeks actually left to sell it. Checking only the sell-through percentage against a plan can mislead a buyer, because a small gap with few weeks left can still fail, while a bigger gap with many weeks left can still recover. Working this out means recording units sold and weeks elapsed, turning that into a weekly pace, projecting how many weeks that pace would need to clear what remains, and comparing that projection against the weeks actually left in the season.
At the week 5 checkpoint, Fairway Stores' own trading report shows Order A behind its planned sell-through. The buyer must decide whether to act now or hold at full price a while longer to see if the pace improves.
Here is the trading report line the planner actually sent the buyer:
Should Fairway Stores take Order A's first markdown now, at week 5, or wait two more weeks to see if the pace of sale recovers? Decide before opening the answer.
Take the markdown now, at week 5. Two facts already in the trading report decide this.
First, the projected 11.7 weeks to clear the remaining stock is already more than double the 5 selling weeks left. A gap this large is not a small shortfall that a slightly better week or two would close; the pace of sale would have to more than double on its own for the style to clear without any price cut.
Second, waiting two more weeks makes the problem worse, not better. At the current pace, two more weeks of full-price selling would clear only about 1,800 more pieces, leaving roughly 8,700 pieces still unsold with only 3 selling weeks left, a shorter runway than today's 5 weeks against a barely smaller stock.
Fairway Stores should take the first markdown now, while 5 selling weeks still remain to work with, rather than delay into a shorter window with a similarly large remaining stock.
Using Order A's own fixed shop price of USD 19.90:
Waiting two more weeks to decide would cost Fairway Stores an extra USD 10,149, because the delay leaves a similarly large remaining stock with fewer selling weeks left, forcing a deeper price cut to still clear it in time.
Open the course workbook's "Markdown timing" sheet. It records cumulative units sold and weeks elapsed at a checkpoint, calculates the actual sell-through rate and the average weekly pace, and projects the weeks needed to clear the remaining stock against the selling weeks actually left, flagging when a markdown is due.
[Download the Markdown and terminal stock worksheet](../../templates/T20-C04-markdown-and-terminal-stock-worksheet.xlsx)
1. A domestic style has 8,000 pieces on an 8-week selling season. By week 4, 3,600 pieces have sold, at an average pace of 900 pieces a week. Does this style need a markdown now?
2. Why does a bigger gap behind a planned sell-through percentage not always mean a style needs a markdown sooner than a smaller gap?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Markdown | تخفيض السعر | Démarque | İndirim (markdown) | A reduction in the shop price of goods that have not sold as forecast, used to clear the remaining stock. |
| Sell-through rate | معدل البيع الفعلي | Taux d'écoulement | Satış oranı | The share of stock actually sold within a planned period, used to judge whether a forecast was right. |
| Stock cover | تغطية المخزون | Couverture de stock | Stok kapsama süresi | The number of weeks a brand's current stock is expected to last before it runs out, given its normal sales rate. |
| Forecast | التوقع (توقع المبيعات) | Prévision (prévision des ventes) | Tahmin (satış tahmini) | A company's own estimate of what it expects to sell, used to decide how much to produce before any specific sale exists. |
| Replenishment cycle | دورة تجديد المخزون | Cycle de réassort | Yeniden stoklama döngüsü | One repeating round of Make to Stock production, run against a forecast rather than a single confirmed order. |
You now know how to judge when a style is behind plan enough to need a markdown. The next lesson looks at the opposite case: a planned promotion run while sales are still on track. Back to the course map