Frequently asked questions

How do I work out pricing for export?

The following components will need to be added to your wholesale price to provide a quote to an overseas customer.

Components of export price

• All costs and charges in producing/acquiring goods including special packaging, modifications, export administration, quality control.
• Any other charges for which the exporter is responsible under the contract of sale (eg. insurance and freight charges for goods sold on CIF).
• Cost of forwarding contract.
• Agents commission.
• Interest to cover post shipment.
• Local and overseas bank commission charges, if applicable.
• Exporter’s profit margin.

Depending on the currency of payment, exchange rates and cost of conversion should also be factored in.

Export pricing methods

Cost plus method = domestic manufacturing cost + admin + R&D + OH + freight forwarding + distributor margins + custom charges + profit.

If the export product has the same ex-factory price as domestic product, the final consumer price may become uncompetitive once all the additional costs are added.

Factoring in fixed and variable costs – consider the direct or variable out-of-pocket expenses of producing and selling products for export as a floor beneath which prices cannot be set without incurring a loss. This sometimes means that you don’t factor in the cost of depreciating your capital equipment and covering your overhead expenses within the export price. Naturally, you can’t price this way in the long term unless your domestic market will accept all fixed cost components of the price.