Sometimes you may want to mark down all the prices in a product catalog, such as a 33% price reduction for your grand opening. You could use a promotion to take 33% off at checkout (see managing promotions) but instead you might want to show the prices with the markdown, similar to a sale tag hanging by the regular price tag.
In the advanced tab of the product catalog is a markdown field. If set, the displayed prices will be adjusted by this percent. This sets the base price of the items, prior to any promotions being applied. So you could, for example, have a 33% markdown and then offer free shipping if they buy 3 or more items, and an additional 10$ off if they order more than $500 in items. As far as the promotions are concerned, the marked down price is the price of the item.
Note: Markdowns are computed without judgement, so you could end up with odd prices such as $20.17 where human judgement might have nudged it to an even $20 or even to $19.99.