Secrets of International Trading

How to Calculate
Costing for Export?
 

Calculate costing for export "A key tasks of an exporter is to calculate the price that the foreign buyer has to pay for his product..."

"An export costing sheet using the cost plus method of calculation is the best way to quote selling price..."

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Export credits insurance - The exporter may buy insurance or "Factoring" on its credit sales abroad. Allowance should be made for it.

Total CFR - The total of the previous items, each of which should be rechecked, is the "Cost & Freight" cost of the export goods.

Marine insurance - The exporter will want to insure itself against financial loss from all possible risks, including damage to the goods or theft, while they are being shipped abroad.

Usually, ocean ships are insured for 110%of their total cost to cover anticipated profit and the interest cost of working capital tied up in the shipment.

Total (C.I.F. local funds)
This is the total price of the goods calculated in such a way as to include all the various costs involved, including insurance and freight. It is the total in item 19, plus the insurance premium.

Conversion into Foreign Exchange - The foreign buyer will usually ask for a price quotation in U.S. dollars or perhaps in German marks, Japanese yen, or some other currency. Therefore the exporter's local currency price must be converted into the foreign currency... Read more

How to calculate Costing for Export?

What's Pricing Competitiveness?

How do you do Export Quotations?

Summary of Export Price Costing

The most usual form of export price quotation is C.I.F. and a named foreign port. This means that the exporter is responsible for paying all costs until the goods arrive at the foreign port.

The price is usually quoted in U.S. dollars. The foreign importer can then calculate his landed cost for the product by adding to the C.I.F. price quoted, the import duty, local taxes and local transportation costs.

To make the product more attractive to foreign buyer, exporters sometimes quote F.O.B. price and a named foreign port or city. Thus, for example, a Japanese firm may quote F.O.B. Hamburg price to its European customers.

Actually, these prices are identical with C.I.F. prices because all the cost of shipping the goods are paid by the exporter.

Recommended reference:
Special International Trade Terms

On the other hand, the exporter may quote F.O.B. Port Klang or F.O.B. KL International Airport, what this means is that the cost of transporting the goods up to the point where the goods are loaded onto the Ship or Airplane and any other service charges are paid by the exporter...Read more