HOW TO CALCULATE EXPORT PRICE

exportation, export, import, import price

Export Price

Production cost and sales price


The cost of production is calculated by collecting the costs of the processes until a product is ready for sale. The selling price is simply stated as cost + profit, but requires the addition of a lot of costs, depending on which conditions you will sell to the customer.

When calculating the unit price of the product for exporters and importers, many things need to be taken into account according to the form of payment and delivery type, except for the production costs. For example, exworks, ie the unit cost account in an export to be made by factory delivery and prepayment, is the cost + profit, while the DDP delivery type and the extra costs that must be taken into account in the sale of a 30-day term: all shipping costs, insurance cost, all customs costs, all costs to be paid taxes and finally the 30-day maturity difference.


How to Create a Export Price?

Exporters should base their product price on exwork price. The basic price for all price quotations should be exworks and cash price, and the difference for other delivery and forward sales should be calculated to reflect the unit cost. If the importer requests a price including one or more of the transport, insurance and customs stages, the additional price must be calculated and the product price re-determined. 

For example, if the importer requests the FOB price, the exworks price, including the transportation of the goods to the nearest port, including the internal transportation cost and the costs of the port should be added.

Exporters often prepare cost tables for their products, including exwork, FOB, CIF, CIP prices, and give customers a price according to the type of delivery requested upon request.


Structure of Export Price

a. Factory cost of product
b. Manufacturer's profit
(a + b) Delivery at Factory Door Product Price ( exworks price )
c. Packaging and Marking
d. Factory Installation
to. Transportation to ports, railways or the airport
f. Costs and costs for port / railway / airport use
g. Document costs (CMR, konişmento v.s.)
h. Certificate of origin
I. If any export duty
(a + b + c + d + e + f + g + h + i) Local Port Costs Included Export Price ( FOB )
j. Insurance premium and policy costs
k. Sea or air transportation costs
l. Port / railway / airport use costs
(a + b + c + d + e + f + g + h + i + j + k + l) Export Price Including Costs Up to Arrival Port (CIF)
m. Discharge costs at the destination
n. Customs duties and other taxes
she is. Clearing costs
(a + b + c + d + e + f + g + h + i + j + k + l + m + n + o) All costs Included Export Price (DDP)
p. Transportation to the importer's warehouse
q. Importer's profit share
r. Wholesaler's profit share
s. Profit share of the retailer
(a + b + c + d + e + f + g + h + i + j + k + l + m + n + o + p + q + r + s) Importer's sale price


What are the factors increasing the cost during export?

- Sales commissions if you have agents
- Additional costs incurred during transportation (demurrage, detention)
- costs of additional documents required for customs procedures (health certificates, permits from legal institutions)
- Financing costs (forward sales, factoring costs, bank cuts)
- Letter of credit expenses (letter of credit opening costs, reserve cuts)
- Packaging costs (importer demands non-standard packaging)
- Cost of labeling and marking (certification costs for markings such as CE)
- Transportation costs within the country (Carriage of containers between factory and port)
- Costs of unloading at the destination of the product.
- Insurance costs
- Transactions such as translation of required documents (Customs certified offices or officially approved officially requested translation)
- Credit maturities
- Costs for storage (warehouse and warehouse costs)

Exporters should consider all cost items listed in this paper when calculating their export sales prices. Another important issue is that exporters should calculate the costs of each export as a separate file. Most of the additional costs listed in this list may occur in an export, but no additional costs may be incurred in another export. Therefore, the unit cost of each export file will be different. For example, a letter of sale with a letter of credit is a more reliable and guaranteed sale compared to the goods, but it has to be included in the costs. On the other hand, in a maritime export, due to unexpected control and paperwork processes, the container carrying your load may be kept in the harbor for days and there may be additional costs such as reimbursement and demurrage.

What are the necessary information when determining the export price?
The same product, by the same exporter, can be exported to different countries, different prices. When you encounter this type of situation, do not assume that you are making arbitrary pricing at this supplier, supplier or competitor. There can be many reasons for this.

Note that these items may vary from country to country, including items such as CIP, DAP, DDP, ie, exporters' price, port costs in the country of destination, domestic transportation, customs costs, local taxes. Another issue is that even in the same country, taxes may be the same, port costs, internal transportation costs may vary greatly from region to region. 

For example, when the door delivery price is given, the transporters offer a more favorable price for northern France than for southern France, even if the vehicles will be shorter. Because northern France is the industrial zone and the load is guaranteed for every truck that will carry cargo there, the truck going south will have to wait for the return load and may not even find the return load, so the shipping cost is higher.

Another issue is the competitive factor. If you are competing with rival companies that already export to the country you want to export, or with local producers in that country, this may lower your profit margin. This information is about costs and targeted foreign markets. The determination of costs will enable the exporter to generate comparative export prices for each market and to see the degree of competitiveness of the exporter in each of the selected markets.

On the other hand, it is also important that the exporter company is informed about the target market. It is important for the exporter to know the size of the target market, competitive conditions, prices of competitors and the expectations of consumers. Sales in this country will be carried out by the importer, but if the exporter knows the market conditions well, he / she acts accordingly when determining the price or negotiating the sales stage.

Providing information on competitive activities in both domestic and foreign markets is vital for accurate pricing. If the Firm is aware of the prices of its competitors or has been able to foresee and determine the additional costs that may occur, it will be able to provide competitive and realistic prices.


Price List in Exports - Checklist

a) Target Market Information
Which countries can be exported?
Who are the major competitors in different countries?
Market size and capacity?
Market growth capacity?

b) Information on Competition
Do competitive products have quality and pricing options?
What are the demands of importers?
What is the market share of competitors?
Financial conditions of competitors in the market?
Are the competition conditions in the market variable?

c) Information About Prices
Prices of competing products?
Are there any leading companies in the market?
What is the relationship between price and sales quantity?
Are there expectations in the market such as discounts, promotions and technical support?

d) Information on State Policies
What are the state policies for exporters and importers?
Do public agencies or government do direct imports?
Do you have any importer companies selling to public institutions?

COMMENTS

BLOGGER: 1
  1. Well done, thank you for this detailed explanation including the calculation of Export Price. We plan to import some goods soon but confused about the final costs. I've sent an e-mail with some details and waiting your kind answer. Look forward to hear from you.

    ReplyDelete

Name

BUSINESS,7,COUNTRIES,13,ECONOMY,4,EDUCATION,2,EXPORT,2,FOREIGN TRADE,7,IMPORT,2,INCOTERMS,13,LOGISTICS,17,MARKETING,3,US STATES,8,US VISA,7,
ltr
item
usatradevisa: HOW TO CALCULATE EXPORT PRICE
HOW TO CALCULATE EXPORT PRICE
https://1.bp.blogspot.com/-kwYORnayPWs/XFlCcltV8cI/AAAAAAAAAEY/qvp5PSf24JgJguquFuLV42BZCgyeegDJgCLcBGAs/s640/export-price-1.jpg
https://1.bp.blogspot.com/-kwYORnayPWs/XFlCcltV8cI/AAAAAAAAAEY/qvp5PSf24JgJguquFuLV42BZCgyeegDJgCLcBGAs/s72-c/export-price-1.jpg
usatradevisa
https://www.usatradevisa.com/2019/02/how-to-calculate-export-price.html
https://www.usatradevisa.com/
https://www.usatradevisa.com/
https://www.usatradevisa.com/2019/02/how-to-calculate-export-price.html
true
7945244635238684512
UTF-8
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content