Setting an export price
To give your products and business the best advantage in your chosen export market, it's important to set an export price that:
- generates a profit for your business, taking your costs into consideration
- is attractive to your export buyer and builds a partnership based on trust
- is competitive in your chosen market
- supports a pricing strategy to deliver future growth
- takes into consideration the current financial and political situation in the country, for example sovereign risk
- covers fluctuations in currency
There are different types of pricing you could consider including:
- competitor pricing – looking at what your competitors are charging and what your costs will be then considering whether you can make profit
- cost plus pricing – adding up all of your costs and then adding a profit on to find out how much to charge
- offering a trial price - coming in with a low price to get people to try your new product
Your market research will guide your decisions on these pricing questions.
Incoterms will help you qualify the price you're charging.
You may need to:
- set yourself up to receive foreign currency payments, with a Euro bank account for example
- issue pro forma invoices so you receive payment before goods are despatched
- think about the contract terms you should negotiate and how attractive they are to you and your export partner
Discuss with the international division of your bank which accounts are best for your business. This will depend on the export market you are trading with and the currency used.