Pricing for export is pivotal to the success of your exporting business.
You need to determine the costs involved in producing your products, getting them to your foreign market and then selling them.
As you develop your pricing strategy, you need to be aware of and factor in all the additional costs that are involved in exporting your product, including:
- production costs
- customs duties
- packaging and shipping
You also need to look at how competitive your pricing level is compared to your competition.
Setting your price
Some things you might consider when setting your price:
- Make the buyer's decision process as easy as possible by preparing your export price list in the currency of the port or country of destination.
- Understand the way business is done in the export market and conduct your business similarly, offering the same value proposal as local suppliers. Payment terms, delivery and after-sale servicing are important considerations.
- Consider currency fluctuations when preparing the price list. Include a proviso in your price list "prices subject to change" to cover you in the event of any price fluctuations.
- Do not include "suggested retail prices" on your wholesale price list, unless requested, as this is not well received, especially in North America.
- Remember that the retailer adds a mark-up on your product as well. While this does not directly affect the preparation of your wholesale price list, it is critical to understand what the retail price of your product would be to the end user.
- It is also important to understand how your prices stack up against your competitors' and make a determination whether the export market can bear your price.