Pricing your product or service for International Success

One of the challenges any company faces when looking to sell global is trying to set prices and the terms of sale for their products and services in foreign markets.

There are many costs incurred in selling overseas and before setting any pricing strategy you need to ensure that all costings and all risk management costs and strategies have been factored into your pricing strategy.

Factors that can immediately impact on your international pricing strategy and terms of sale and ultimately your profit margin include:

  • currency exchange rates
  • economic conditions
  • production expenses
  • your competitors and the consumers in your target market
  • export transaction costs
  • risk management expenses
  • managing your freight costs

Before you enter any new market you need to ensure that your price is competitive with what is on offer in the market, but you will also need to factor in the cost of marketing and managing your export transaction and risk management strategies.

Getting your international pricing strategy right is crucial to the success of your business. It is difficult to go back and renegotiate your price once this has been set and also you ultimately cannot risk potentially not getting paid.

Key Considerations

Incoterms® 2010: avoid costly misunderstandings by clearly defining the responsibilities of sellers and buyers for the delivery of goods. ICC’s Incoterms® rules are regularly incorporated into sales contracts worldwide. This module is a basic introduction to understand why Incoterms are vital to understanding your risk but also your responsibilities and potential liability.

Pricing for international markets: an in-depth module that will guide you through the requirements for costing for international markets. Companies will be taken through a template costing guide and will have the opportunity to workshop through applying the basic rules for export costing.

Risk management: this module will take you through all of the risks specifically associated with export documentation, transport and insurance. It is important that companies understand how they can manage their risk upfront and understand the added costs of export so that they can set their international pricing strategy accordingly.

Managing your foreign exchange risk: understand the basic mechanisms of managing manage your foreign exchange risk.

International sales contracts: international contract for the sale of goods and services can be complex. This module is an introduction only and will take companies through key considerations to look out for in any international sales contract, including:

  • General characteristics of the contract
  • Scope of application
  • Termination of the contract
  • Dispute resolution
  • Jurisdiction and role of law

The ECA runs a one day workshop on pricing for international success.





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Dee-Ann Prather, Down Under Enterprises International
NSW Women in Global Business Award winner
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