Key signals include sell-through rate below your target pace (typically 80% of seasonal buys sold before peak), weeks of supply above your max threshold, and proximity to end of season. For fashion retail, missing your Week 6-8 sell-through rate is typically the trigger for first markdown. Waiting longer compresses your recovery.

The first markdown is the most important — it needs to be large enough to move units but not so large you destroy margin unnecessarily. Most buyers use a 20-30% initial markdown as a test. If velocity doesn't respond within 2 weeks, take a second markdown. The calculator shows you the margin impact of each scenario so you can make the decision on numbers, not instinct.

Uncleared seasonal inventory ties up open-to-buy for next season, often gets written down at cost or less, and may require closeout at 10-20 cents on the dollar. The calculator's dead-stock risk flag compares the cost of an early markdown against the projected cost of a late season write-off — in most cases, the early markdown recovers more.

Sell-through rate is the percentage of units sold out of units received, usually measured at a point in time relative to your selling calendar. A target of 80%+ by end of season is common for apparel and seasonal hard goods. Category and product lifecycle affect the right target — basics can be replenished, fashion cannot.