Pricing in Export

Pricing in Export

Pricing and Logistics Application in Exportation
The titles we will consider when determining the price of our export product are briefly;
A. Production cost, (in short, the cost of our product up to the loading ramp at our own address)
B. Additional costs due to exports,
C. On-board delivery, loading costs, (FOB)
D. Shipping Costs (for sales in the form of delivery to the customer's port or address)
E. Profit
F. Acceptable prices in the target market, prices of competing products

Since the last two of these (E and F) will vary according to the company's marketing strategy and policy, we leave them out of our subject matter, and our explanations for what the related costs may be with the other top four titles (A, B, C, D) and what is being done and what issues are being paid attention to are below.

A. Production Cost; Since this title concerns the production and accounting departments and should be notified by them, we will conduct pricing and bid preparation based on the bare cost reported to us.

B. Additional Costs That Could Be Due to Exporting
These costs come and change according to the demand of the order, the product, the customer, and the state of the country we will export.
– Insurance
– Extra packaging cost, palletizing, as it can stretch different packaging due to export,
– Different labeling (if the customer has a request),
– Heat treatment (if we use timber packaging and it is necessary for our client's country),
– Surveillance and documentation,
– Consular confirmation,
– Bank expenses,
– Customs
– Sample, cartel, brochure
– Negative changes in exchange rates

C. Costs of loading (FOB)
In container or complete ship (conventional) loading, the delivery price of the loading port is, in other words, the first step in being able to give FOB price and calculate logistics costs TRUE, the most important point to be noted first; It is the calculation of the amount of goods that can be loaded into a container or ship warehouse in weight and volume as TRUE. Adjusting orders from the customer to fit in the container will prevent inland shipping (from storage to port) from unnecessarily rising inland and loading costs.
The costs of delivery (shortly FOB delivery) within the vessel at the port include;
– Domestic shipping (shipping from warehouse to factory)
– THC (handling costs within the port)
– Port warehouse costs (in some cases we may encounter)
– Free in (cost to ship)
– Stacking, balancing, pilling (lashing, trimming), stacking, securing, securing the goods in the container or in the ship's hold on complete shiploads

D. Shipping Costs (for sales in the form of delivery to the customer's port or address),
The first thing to do in this regard is to calculate the amount of goods that can be loaded into a trailer in weight and volume as TRUE. Adjusting orders from the customer to fit in the vehicle will prevent unnecessary increase in shipping costs.
Some other points of interest in logistics;
– Taking into account the cost items above,
– Taking into account the weight capacity of the container and the weight limits of the highways during transport on the road (internal transport),
– Taking into account the weight that the trailers can legally carry in the countries they will go and cross on the road (the weight limit on the roads),
– The container has no holes, no damage,
– Containers or trailers are clean, odorless in sensitive loads such as food,
– The container seal is fitted by the exporter after the loading is finished,
– Taking photos during loading and after the seal is attached,

Last word: Let's repeat it because we see it as very important; Accurately calculating how much goods can be loaded into a container or trailer or ship's hold, in weight and volume, the order must be adjusted based on that amount. This type of error, which can be made in the beginning, will cause us to give the wrong price.

Hüseyin TEKGÜÇ
www.inovakademi.com