How do you calculate maintained markup?

Maintained markup $ = net sales − cost of goods sold, and maintained markup % = (net sales − cost of goods sold) ÷ net sales × 100. With this calculator’s default inputs, $500,000 of net sales less $225,000 of cost of goods sold is $275,000, and 275,000 ÷ 500,000 = 55.0%. The denominator is net sales — not the original ticket value of the goods, and not their cost.

What is the difference between IMU and maintained markup?

IMU is the markup on the first ticket, measured against original retail before any reduction. Maintained markup is the markup the goods actually kept, measured against net sales after markdowns, promotions, discounts, shrink and damages. With the default inputs, goods that sold for $500,000 after $100,000 of reductions had an original retail of $600,000 and a cost of $225,000: IMU was (600,000 − 225,000) ÷ 600,000 = 62.5%, and maintained markup is 55.0%. The 7.5-point gap is the 20.0% of reductions multiplied by the 37.5% cost complement.

How do I turn a target maintained markup into an initial markup?

Required IMU % = (MMU % + reductions %) ÷ (100% + reductions %), with reductions as a percentage of net sales. A 55% maintained-markup target with planned reductions of 20% of net sales needs (55 + 20) ÷ 120 = 62.5%. On an $18.00 landed unit cost, that IMU puts the first ticket at 18.00 ÷ (1 − 0.625) = $48.00; after 20% reductions on net sales the unit rings $40.00 on average and keeps $22.00, which is 55.0%. Do not add the two percentages: 75% overprices every unit.

Should I enter reductions as a percentage of net sales or of original retail?

Net sales. The formulas on this page take reductions over net sales, and the same dollars give a different figure over original retail: with the default inputs, $100,000 of reductions is 20.0% of $500,000 of net sales and 16.7% of $600,000 of original retail. Enter the 16.7% in the Plan panel and the required IMU solves to 61.4% instead of 62.5%, and the goods keep 53.7% instead of 55.0%. To convert, reductions % of net sales = reductions % of original retail ÷ (100% − reductions % of original retail).

Which cost do I enter — landed or invoice?

Landed: the merchandise invoice plus inbound freight, duty, brokerage and handling, and the same basis the initial markup was struck on. If the IMU was computed on landed cost and the maintained markup on the invoice cost, the erosion between them is understated by the freight share; the reverse overstates it. Whichever basis the plan uses, use it on both sides.

Is maintained markup the same as gross margin?

No. Gross margin = maintained markup + cash discounts earned on vendor invoices − workroom and alteration costs, over net sales. Where those two lines are small and stable the figures are close enough to be used as one; where vendor allowances, chargebacks or alteration costs are material they are not. This calculator returns maintained markup; the conversion, and when the two can safely be treated as one number, are worked through in the maintained markup guide.

// Tools

Maintained markup (MMU) calculator

Maintained markup (MMU) is the difference between net sales and the cost of the goods sold, as a percentage of net sales — the markup a range actually kept after markdowns, promotions, employee discounts, shrink and damages came out of the initial ticket. Measure it from net sales and cost, or plan it: enter a target MMU and the reductions you expect, and the calculator returns the initial markup the first ticket has to carry and the retail price that IMU implies for a unit cost.

The IMU on the ticket is the IMU calculator’s number; the price and margin of a single markdown is the markdown calculator’s; this one sits between them, on the markup that survives.

Working the method rather than checking a number — what belongs in reductions, why they are measured on net sales, MMU against gross margin and cumulative markup, and reading it against plan in-season?

Read the Guide →

// Measure — what the goods kept

Net sales ($)

Cost of goods sold ($, landed)

Total reductions ($, optional)

Net sales as they rang, after returns and after every markdown, promotion and discount. Cost of goods sold is the landed cost of every unit that left stock — sold, lost to shrink or written off. Reductions (markdowns + promotions + employee discounts + shrink + damages) are optional; with them, the calculator also returns the original retail and the IMU the goods carried. The inputs are pre-filled with the worked example below.

MMU: 55.0%

$275,000 of maintained markup on $500,000 of net sales. (Net sales − cost of goods sold) ÷ net sales.

Maintained markup $ (net sales − cost)

$275,000

Maintained markup % (on net sales)

55.0%

Cost complement on net sales (cost ÷ net sales)

45.0%

Reductions % of net sales

20.0%

Original retail of the goods sold (net sales + reductions)

$600,000

Implied IMU % on the original ticket

62.5%

// Plan — the IMU a target MMU requires

Target maintained markup (%)

Planned reductions (% of net sales)

Unit cost ($, landed, optional)

Reductions as a percentage of net sales, not of original retail — the same $100,000 is 20.0% of $500,000 net and 16.7% of $600,000 at ticket, and the formula needs the first. Add a landed unit cost to see the first-ticket retail the required IMU implies.

Required IMU: 62.5%

(55.0% + 20.0%) ÷ (100% + 20.0%). The first ticket has to carry this markup for 55.0% to survive reductions of 20.0% of net sales.

Required IMU % (on original retail)

62.5%

Cost complement (100% − IMU)

37.5%

First-ticket retail for the unit cost (cost ÷ (1 − IMU))

$48.00

Average net selling price a unit (retail ÷ (1 + reductions %))

$40.00

Maintained markup $ a unit (average net − cost)

$22.00

MMU if ticketed at the target itself (no room left)

46.0%

// How it works

01
Measure: enter net sales and cost of goods sold
Net sales as they rang, after returns and after every markdown, promotion and discount. Cost of goods sold is the landed cost of every unit that left stock in the same window — sold, lost to shrink or written off — on the same cost basis the initial markup was struck on.
02
Measure: add total reductions (optional)
Markdowns + point-of-sale promotions + employee discounts + shrink + damages, in dollars. With them the calculator returns reductions as a percentage of net sales, the original retail of the goods sold (net sales + reductions) and the IMU those goods carried on the first ticket.
03
Read MMU in dollars and percent
Maintained markup $ = net sales − cost of goods sold. Maintained markup % = that figure ÷ net sales × 100. The denominator is net sales, never original retail and never cost.
04
Plan: enter a target MMU % and planned reductions % of net sales
Required IMU % = (MMU % + reductions %) ÷ (100% + reductions %). This is the markup the first ticket has to carry for the target to survive the reductions. Add a landed unit cost to see the first-ticket retail that IMU implies: cost ÷ (1 − IMU %).

// Formulas

Every formula the calculator runs

Each output is one line of arithmetic on the inputs above. Reductions are always a percentage of net sales; cost is landed, on the same basis as the initial markup.

Maintained markup $ = net sales − cost of goods sold
Maintained markup % = (net sales − cost of goods sold) ÷ net sales × 100
Cost complement on net sales = cost of goods sold ÷ net sales = 100% − MMU %
Reductions % = total reductions ÷ net sales × 100
Original retail of the goods sold = net sales + total reductions
Implied IMU % = (original retail − cost of goods sold) ÷ original retail × 100
Required IMU % = (target MMU % + reductions %) ÷ (100% + reductions %)
Cost complement = 100% − required IMU %
First-ticket retail = unit cost ÷ (1 − required IMU %)
Average net selling price a unit = first-ticket retail ÷ (1 + reductions %)
Maintained markup $ a unit = average net selling price − unit cost
MMU if ticketed at the target itself = target MMU % − reductions % × (100% − target MMU %)

The Measure and Plan panels are one identity read from either end. Forward, from the ticket: MMU % = IMU % − reductions % × (100% − IMU %). Backward, from the plan: IMU % = (MMU % + reductions %) ÷ (100% + reductions %). Enter the implied IMU and the reductions % that the Measure panel returns into the Plan panel, and the required IMU it returns is the IMU you started from.

// Worked example

The default inputs, worked by hand

The calculator opens with these figures filled in. They are illustrative — not a benchmark, not a recommended markup, and not drawn from any brand. A class rang $500,000 of net sales over a season against $225,000 of landed cost of goods sold, having given up $100,000 in markdowns, promotions, employee discounts, shrink and damages.

Maintained markup $ = 500,000 − 225,000 = 275,000
Maintained markup % = 275,000 ÷ 500,000 = 55.0%
Cost complement on net sales = 225,000 ÷ 500,000 = 45.0%
Reductions % = 100,000 ÷ 500,000 = 20.0% of net sales
Original retail = 500,000 + 100,000 = 600,000
Implied IMU = (600,000 − 225,000) ÷ 600,000 = 62.5%
Check: 62.5 − 20.0 × (100 − 62.5) ÷ 100 = 62.5 − 7.5 = 55.0%

The Plan panel runs the same class forward for next season. The plan needs 55% again and expects reductions of 20% of net sales; a new style in the class has an $18.00 landed cost:

Required IMU = (55 + 20) ÷ (100 + 20) = 75 ÷ 120 = 62.5%
Cost complement = 100 − 62.5 = 37.5%
First-ticket retail = 18.00 ÷ 0.375 = $48.00
Average net selling price = 48.00 ÷ 1.20 = $40.00
Maintained markup a unit = 40.00 − 18.00 = $22.00, and 22.00 ÷ 40.00 = 55.0%
Ticketed at 55% instead: retail 18.00 ÷ 0.45 = $40.00, and MMU = 55 − 20 × 0.45 = 46.0%

The last line is why the first ticket carries more than the plan needs. Every reduction after the first ticket comes out of the markup on it and nothing puts it back. Ticketed at the 55% target, the style has no room for the 20% of reductions the plan expects, and once they are taken it lands nine points under plan. The 62.5% is not a richer target; it is the same target with the reductions priced in.

// Measure or plan

Which panel answers which question

The two panels take the same identity from opposite ends, and they are used at different points in the season.

The Measure and Plan panels compared: when each is used, what it takes, what it returns and the decision it feeds.
	Measure	Plan
When	In-season and at the close, on actuals	Pre-season, at costing and ticketing
Takes	Net sales, cost of goods sold, total reductions	Target MMU %, planned reductions %, a unit cost
Returns	MMU $ and %, reductions % of net sales, original retail, implied IMU	Required IMU %, cost complement, first-ticket retail, average net price and margin a unit
Read against	The planned MMU for the same level and window	The IMU on the costing sheet and the price architecture
Feeds	The remaining markdown budget this season; next season’s IMU and depth	The ticket, the cost ceiling at each price point, the open-to-buy cost complement

When

Measure: In-season and at the close, on actuals
Plan: Pre-season, at costing and ticketing

Takes

Measure: Net sales, cost of goods sold, total reductions
Plan: Target MMU %, planned reductions %, a unit cost

Returns

Measure: MMU $ and %, reductions % of net sales, original retail, implied IMU
Plan: Required IMU %, cost complement, first-ticket retail, average net price and margin a unit

Read against

Measure: The planned MMU for the same level and window
Plan: The IMU on the costing sheet and the price architecture

Feeds

Measure: The remaining markdown budget this season; next season’s IMU and depth
Plan: The ticket, the cost ceiling at each price point, the open-to-buy cost complement

A measured maintained markup is only comparable when its level, window and cost basis are stated beside it. Build class and department figures by adding net sales and cost across the lines and dividing once, never by averaging percentages; read a season-to-date figure against the season-to-date plan, not the season total; and keep reductions to date beside the reductions budget phased the same way, so that a promotion pulled forward or a clearance deferred is read as timing rather than margin. The maintained markup guide works through each of those with one class month by month.

The Plan panel’s required IMU is the number the IMU calculator prices a style to, and the initial markup guide covers where the target itself comes from, the landed cost under it and the class blend. The reductions the plan expects are sized in how to build a markdown plan; the margin a single cut leaves is in the markdown calculator, and the unit lift it has to earn in the break-even markdown calculator.

RetailNorthstar connects pricing and markdown assumptions to the plan, so initial markup and maintained margin stay linked from line plan to season close — see more retail tools.

Start Free Trial →See RetailNorthstar →

// FAQ

Frequently asked questions

How do you calculate maintained markup?: Maintained markup $ = net sales − cost of goods sold, and maintained markup % = (net sales − cost of goods sold) ÷ net sales × 100. With this calculator’s default inputs, $500,000 of net sales less $225,000 of cost of goods sold is $275,000, and 275,000 ÷ 500,000 = 55.0%. The denominator is net sales — not the original ticket value of the goods, and not their cost.
What is the difference between IMU and maintained markup?: IMU is the markup on the first ticket, measured against original retail before any reduction. Maintained markup is the markup the goods actually kept, measured against net sales after markdowns, promotions, discounts, shrink and damages. With the default inputs, goods that sold for $500,000 after $100,000 of reductions had an original retail of $600,000 and a cost of $225,000: IMU was (600,000 − 225,000) ÷ 600,000 = 62.5%, and maintained markup is 55.0%. The 7.5-point gap is the 20.0% of reductions multiplied by the 37.5% cost complement.
How do I turn a target maintained markup into an initial markup?: Required IMU % = (MMU % + reductions %) ÷ (100% + reductions %), with reductions as a percentage of net sales. A 55% maintained-markup target with planned reductions of 20% of net sales needs (55 + 20) ÷ 120 = 62.5%. On an $18.00 landed unit cost, that IMU puts the first ticket at 18.00 ÷ (1 − 0.625) = $48.00; after 20% reductions on net sales the unit rings $40.00 on average and keeps $22.00, which is 55.0%. Do not add the two percentages: 75% overprices every unit.
Should I enter reductions as a percentage of net sales or of original retail?: Net sales. The formulas on this page take reductions over net sales, and the same dollars give a different figure over original retail: with the default inputs, $100,000 of reductions is 20.0% of $500,000 of net sales and 16.7% of $600,000 of original retail. Enter the 16.7% in the Plan panel and the required IMU solves to 61.4% instead of 62.5%, and the goods keep 53.7% instead of 55.0%. To convert, reductions % of net sales = reductions % of original retail ÷ (100% − reductions % of original retail).
Which cost do I enter — landed or invoice?: Landed: the merchandise invoice plus inbound freight, duty, brokerage and handling, and the same basis the initial markup was struck on. If the IMU was computed on landed cost and the maintained markup on the invoice cost, the erosion between them is understated by the freight share; the reverse overstates it. Whichever basis the plan uses, use it on both sides.
Is maintained markup the same as gross margin?: No. Gross margin = maintained markup + cash discounts earned on vendor invoices − workroom and alteration costs, over net sales. Where those two lines are small and stable the figures are close enough to be used as one; where vendor allowances, chargebacks or alteration costs are material they are not. This calculator returns maintained markup; the conversion, and when the two can safely be treated as one number, are worked through in the maintained markup guide.

// Related resources

See the connected workflow in RetailNorthstar →