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
Member of the ECA
“90% of our business is export based and we are expanding rapidly throughout Asia. As we move into new countries and regions it is important to understand the country, culture and business norms and ECA has helped us do this through their programs. ECA has also helped us improve our shipping and documentation efficiency, especially with the new GHS requirements. Overall, ECA is a wealth of information and knowledge and have always been very helpful when we have specific issues or questions.”
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Nuix is the 2015 Premier's NSW Exporter of the Year. As a technology company that protects, informs and empowers society. Nuix has more than 1,500 customers in over 60 countries, including all major global regulatory agencies, leading security and law enforcement agencies, all tier one advisory and litigation support vendors, and many of the world's leading financial institutions, corporations and government departments.