eBay markdown sale: when a discount pays and how to set one up without losing money

What is an eBay markdown sale?

An eBay markdown sale is a promotion that cuts the price of chosen listings by a percentage or a fixed amount for a set period. Buyers see the sale price alongside the original price struck through, and the listing can carry a sale label in search results and on the listing page. You set it up in Seller Hub, under the Marketing tab, alongside other promotion types such as order discounts and coupons. Which promotion types you can use depends on your account, so check the Marketing tab for what is available to you.

Markdowns are one of several promotion tools, and they are the bluntest: every buyer of a discounted listing gets the saving, including those who would have paid full price. That is not a reason to avoid them, but it is a reason to use them deliberately, on chosen listings, for a reason you can name.

A markdown is different from simply lowering your price. A permanent price cut is invisible as a "deal"; a markdown shows the saving and has an end date, which can prompt buyers who have been watching an item to buy now.

When does a markdown sale pay?

A discount always reduces profit on each sale. It pays only when it brings enough extra sales, or brings them at a useful time, to make up for that. Situations where it often makes sense:

• Slow-moving lines that get views and watchers but few sales.
• End of season stock or seasonal listings you want to clear before demand drops.
• Busy shopping periods, when buyers are actively looking for deals.
• Listings with healthy margins, where a discount still leaves solid profit.
• Building early sales history on new listings, since eBay names popularity among its Best Match factors.

Situations where it usually does not pay: items already selling steadily at full price, items at or near your minimum profit, and items where your supplier's stock is too uncertain to handle a rush of orders.

How do you set a discount from your costs?

Work out the lowest price each item can sell at while still clearing your minimum profit, then make sure the discount never takes it below that floor.

1. List the item's supplier cost, including delivery.
2. Add your minimum profit per sale in pounds.
3. Gross up for eBay's fees and any ad fee, since they are charged on the sale amount. Business seller fees vary by category; check eBay's selling fees page.
4. That gives your floor price. The largest discount you can offer is the gap between your current price and the floor.

Worked example: is a 15% markdown worth it?

Example (hypothetical numbers): suppose you sell a desk organiser at £30.00. Supplier cost is £15.00 delivered. For the arithmetic, assume eBay fees and ads together take 15% of the sale price; this is an illustration, not eBay's rate. At full price you sell 20 a month.

A 15% price cut reduces profit per sale by over a third, so you need roughly 60% more sales just to stand still. If the markdown lifts sales from 20 to 25, you make less money overall. If it lifts them to 40, you make more. The lesson is that discounts look small to buyers but large in your margin. The figures are invented for the sum.

How do you set up a markdown sale step by step?

1. Choose the listings. Pick by rule, such as listings with watchers but no recent sales, or a seasonal category, rather than discounting everything.
2. Check each floor price. Exclude any listing where the discount would take it below your minimum profit.
3. Pick the discount type. A percentage suits a range of prices; a fixed amount can look stronger on low priced items.
4. Set the dates. A defined period, such as a week or a weekend, gives buyers a reason to act.
5. Check stock. Confirm your supplier can handle more orders than usual for those items, with normal dispatch times.
6. Review afterwards. Compare units sold, profit and views during the sale with the same period before.

Use honest reference prices. The struck-through price should be a price you have genuinely been charging, not one raised just before the sale to make the discount look bigger. Buyers and eBay expect sale prices to reflect a real saving.

Timing a markdown

The same discount can do very different things depending on when it runs. Before a seasonal peak, a markdown can build early sales history on new seasonal listings. During a busy shopping period, it helps you stand out among other deals. After a peak, it clears lines that will soon stop selling. Mid-season on a steady seller, it mostly gives away margin. Decide which of these jobs the sale is meant to do before you choose the listings and the size of the discount.

What to measure afterwards

Judge a markdown on profit, not on the number of sales. For the sale period and the same length of time before it, record units sold, revenue, profit after fees and ads, and views. Then look at the weeks after the sale too: if sales drop below normal once prices return, some of the "extra" sales were simply buyers who would have bought anyway, a little later, at full price. Keep a short note of each sale's results so you can see which kinds of markdown really pay for your shop.

Markdowns, offers or order discounts: which should you use?

The tools are not exclusive. A sensible pattern for many shops is an order discount that runs most of the time to encourage larger baskets, offers sent to interested buyers each week, and a markdown only for specific moments such as the end of a season.

Order discounts often protect margin better than markdowns, because the discount only applies when the buyer spends more. Offers to interested buyers target the people most likely to buy, so you give the discount only where it matters. Our guide on eBay Best Offer for sellers covers setting offer prices from costs.

What can go wrong with a markdown sale?

• Selling below cost after a supplier rise. If the supplier raises a price during the sale, the discounted price may fall below cost. Watch supplier prices closely while a sale runs. If you use repricing software, check how it treats promotions; the Dropizon documentation explains its pricing formula and guards.
• Stock running out. A sale can bring a rush that empties the supplier's stock, leading to cancellations that count against your record.
• Training buyers to wait. Constant sales teach buyers never to pay full price. Use markdowns occasionally and with purpose.
• Stacking discounts. A markdown combined with Best Offer or an order discount can push the final price lower than intended. Check how promotions combine before you launch.

If you dropship, the extra orders also test your supplier. eBay allows dropshipping from a wholesale supplier, but listing an item and then buying it from another retailer or marketplace that ships directly to your buyer is not allowed, and you remain responsible for delivery and buyer satisfaction, as eBay's drop shipping policy sets out.

A markdown checklist

• Listings are chosen by a clear rule, not "everything".
• Every discounted price clears your minimum profit after fees and ads.
• The struck-through price is one you have genuinely charged.
• The sale has fixed start and end dates.
• Your supplier can handle extra orders with normal dispatch.
• You know how this promotion combines with any others.
• You will compare profit, not just sales, before and after.

Pick three listings with watchers and no recent sales, work out their floor prices today and plan a short markdown for them.