How do I build a tiered markdown ladder for my boutique's summer sale?
Create three discount tiers — 20% off, 30% off, and final clearance — with specific sell-through and weeks-of-supply triggers that move styles between tiers over time.
“At a forty percent margin, a thirty percent discount means you need to sell four times the volume just to break even. Not double — four times.”
A tiered markdown ladder replaces guesswork with rules. Start by identifying styles that are selling fine (sell-through above 70% or weeks of supply below 4) and leave them at full price. For your first tier at 20% off, include styles with sell-through below 50% at the season midpoint and weeks of supply greater than 8.
After two to three weeks at 20% off, check again. If sell-through is still below 70% and weeks of supply still exceeds weeks remaining in the season, move those styles to tier two at 30% off. Tier three is final clearance at 40–60% off for items older than 12 weeks or with only 2–3 weeks left in the season.
The critical rule: never price below your landed cost times 1.1 to 1.2. That margin floor protects you from selling at a loss. Write these tier rules on paper and post them at the register so your staff can follow them consistently without guessing.
Listen to the full episode: Episode 25: How to Price Your Summer Sale to Protect Margins While Clearing Inventory (The Math Every Boutique Needs)
More answers from this episode
- How do I calculate my true cost per piece for boutique inventory?
- How do I create a weekly markdown dashboard for my boutique?
- How do I set up Shopify compare-at price for a sale correctly?
- Should I discount basics and trendy pieces the same way during a summer sale?
- Should I put my best-selling styles on sale during a summer clearance?
- Should I try anything before putting summer inventory on sale?
Source: BoutiquePulse podcast. Last updated: 2026-06-03 · Sourcing & methodology · Corrections log