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Secrets of International Trade

How to Quote for
Export Price Competitiveness?

 

Part 1

Part 2

Part 3

 

 
 

"How to carry out costing
in your local currency and
convert to foreign currency for
export pricing of your products?"
 

Summary of Export Price Costing

"...make a product price more attractive to foreign buyer, by quoting FOB price and a named foreign port or city"

 

Here are some basic example of how costing can be done in local Malaysian currency and thereafter, can be easily converted to foreign currency for export pricing of product.
 

1. Determine Product Cost -- in your local currency.


2. Determine Factory Sales Price -- in your local currency.


3. Determine Shipping/Export Cost -- in your local currency.


4.Total the above 1, 2, 3 costing and convert into foreign current to arrive at your export price in foreign currency.

 

 

 
  1. Determine the cost of your product:

Your local currency, example Ringgit Malaysia RM

A Materials Cost ..................... RM ?
B Labor Cost .......................... RM ?
C Factory overhead ................. RM ?
D Administration Cost............... RM ?
E Selling Costs ..........................
(phone, internet, travel, etc.)
RM ?
F Advertising, catalogues etc.... RM ?
    =========
G Add up all the above cost
to arrive at your
Product Cost
RM ?
  Next

2. Determine Factory Sale Price

 
 
H Use your above Product Cost RM ?
I Add Crating cost .................... RM ?
J Add Forwarding cost ............. RM ?
K Add Documentation cost ....... RM ?
L Add Product Insurance cost ... RM ?
M Deduct Duty Drawback, if any.. RM ?
N Add your required Profit .......... RM ?
    =========
O Total it up, this will be your
Basic selling price >>>>>>>
RM ?
P Add Agent's commission ........ RM ?
Q Add Bank Interest ................... RM ?
    =========
R Total it up, this will be your Factory sales price or ExWorks Price RM ?
 

 

 
 

Next

3. Determine Shipping/Export Cost

S Use your above (R) Ex Works Price RM ?
T Add Local Inland Freight, Wharfage Charge etc. RM ?
  =========
U

Total it up and this is now your

FOB price
V Add Ocean or Air Freight Marine Insurance RM ?
    =========

 W

Total it up and this is now your CIF price
  Next

4. Determine your Export Price in US$

 
 
 
X Take your above C.I.F. price RM ?
Y Add the charges for shipping your goods to the foreign port of entry (C.I.P.) RM ?
    =========
Z Total it up and convert it into foreign currency at current exchange rate and this will be your C.I.F. export price to the foreign port of entry in US$ This is your
CIF export price in US$
=========
 

 

 
Part 1/3
The export cost-plus method
of pricing will ensures that you will be selling at a profit.

 
Part 2/3
Export Price Competitiveness and how to calculate export price quotation?

 
Part 3/3 <This Page
How to do costing in your local currency and convert to foreign currency for export pricing?

 
 

Recommended further reading...

Analysis of Export Pricing - Most foreign buyers prefers to be quoted in their local currency or in US Dollars.

Pricing Strategy for Export -
Pricing procedure for costing and export quotation.

 

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