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9. Would the product meet foreign health and safety
10. What if the technology is changing fast? 11.How do we keep ahead of the competition?
12. Can we produce the quantities of product 13. Will we be able to maintain continuity of supply?
Another research that would-be exporter should undertake is the export price for the product. Most foreign buyers prefer to be quoted an all-inclusive price, in their local currency or in US dollars, delivered to their warehouse, nearest port, airport, or city. In other words, it is not enough for the would-be exporter to calculate an export FOB or FOR to his own local port of shipment. He must calculate the price right through to the foreign country, an export price that is CIF, FOB or FOR called Incoterms known as Special International Trade Terms The guiding principle in calculating an export price is to make sure that all possible costs are included using a Costing Sheet to ensure that no items have been overlooked. The first item is the production cost. Here a decision must be made whether it includes both variable or direct and fixed costs-(overhead costs). Some exporters, to help keep their export prices competitive, include little or no overhead cost, only the variable or direct cost of production. The cost of administrative overhead is absorbed in the price set for local sales. The risk exists with this practice for your goods being sold abroad at less than the home country price is - there may be the imposition of an anti-dumping duty on your product. In addition to all the various production, transportation, customs, marketing, insurance, exporter's profit margin and other costs that must be included in the final landed price. Different foreign markets, if the exporter is considering different foreign markets, he would have to prepare different price quotations. If the foreign market is very large, as with The EEC, he may need to have different prices for each region, taking into account varying transportation costs. Some flexibility is important, the exporter may need to offer some discount to the foreign buyer for large orders or if the buyer is willing to pay cash. Once the exporter has calculated the final selling price for his product How to do Costing for Export?, he must compare this with the price charged for competitive products. Decision ahead of time by the exporter on the amount of credit, if any, to be given to the foreign buyers and how payment is to be made Get Paid for Exporting for example; sight draft drawn against an irrevocable letter of credit.
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"An Important question 'export research'
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Recommended references
Pricing procedure
for costing and export quotation
Costing in your local
currency and convert to foreign currency for export pricing of your
products. |
