The Top 5 Make/Break Aspects of Export Pricing

So, you thought determining the price of your product was simply putting a desirable price tag to it?

 Think again! It can’t be merely wishful. Can it? On the other hand, adventurous manufacturers like Apple have always sought, fought and got the price they wanted. Thus, the question is, how do you choose a price that will leverage your ROI and maximise your sales?

Actually, it turns out that the process of determining the price of your product is just as complicated as the various processes involved in its manufacture. Pricing is never a random affair. It takes strategizing, processing of various ideas, lot of number crunching, and considering the financial and political climate of the country you want to export to as well. These will help you to arrive at the perfect price for your product. If you aim too high, there are chances your product may not sell as much, and if you aim too low, your profit margins will take a big hit. During times of such confusion, when you need to arrive at a conclusive pricing decision, here are five essential factors to consider before giving your product a price tag

1) Cost of the Product

The most crucial factor to take into account when developing a pricing strategy is considering the actual cost that went into making of the product. These costs are generally divided into two main sectors: Direct Costs and Indirect Costs.

  • Direct Costs are usually the costs you incur for actions like acquiring raw material, paying labour charges to the workers and other direct expenditure involved while assembling the actual product.
  • Indirect Costs are the ones that pertain to the manufacturing office and administrative costs. These are in addition to the costs incurred for selling and distribution of the product.

2) Competition

The export market is full of competitors who are willing to one up on you in terms of pricing. In such scenarios, where competitors take the cake, there are two viable options to decide an effective price for your product. You can either charge a reasonable price for your product and enjoy the benefits of bulk exports; or you can charge a higher amount by ensuring that your product is top-of-the-line and far more superior in quality when compared to any of your competitors.

3) Supply vs. Demand

The pricing of your product is also dependant on the demand of your product versus the available supply of it. If the supply of your product is more than the demand, it is obvious that the price range of your product will have to be on the lower side. Now, when the demand is high and the supply of your product is scarce, the pricing can be strategized in a manner that allows you to reap optimum profits.

4) Government Offered Incentives

The governments of developing countries, such as India, are offering their exporters various incentives regarding their trades. It becomes easier for exporters to attach beneficial prices to their products. Exporters of developing countries receive various financial benefits like tax exemptions, customs and excise duty exemptions and trade agreements. These make it easier for exporters to charge their consumers a reasonable amount.

5) Branding and Reputation

Brands have the advantage of pricing their products on a higher and more evolved pricing scale. This is based on the reputation and quality measures they have established for themselves in the market. As an established brand name, pricing becomes easier because the consumer trusts your product more and is willing to pay for the quality benchmark set. In this case, exporters working on a smaller scale can realign their prices to a lower cost, in order to target the consumers who are keen on opting for a more reasonable option.

Each one of the above is instrumental in determining the export price of your product, which can make/break a deal after hours of deliberating with a potential client. Therefore, now that you have a fair idea on how to select the best price range for your product, you can gear up and start exporting to the right consumers. Hop on!

 

 

3 Reasons Why You Should Market Your Export Products

So, you’ve got all your products queued up, all ready to export; but have you considered how to take on the world of foreign trade effectively?

Exporting involves only the best of goods for trade. Yes, to ensure quality, only the best products are procured from places that specialize in manufacturing them. These are then shipped overseas and find a place in the international marketplace.

While exporting is a lucrative option that allows its patrons to enjoy top quality products at the best of prices, it offers immense scope to the merchants to broaden the horizons of their businesses. Manufacturing products in bulk and shipping them overseas may sound simple enough for exporting. However, a meticulous scrutiny, a probe into the EXIM world reveals the complex labyrinth through which the logistics and financial transactions breathe, raking in profit for the merchants. Now, how much do they profit is subject to how well they market their products.

Besides, exporting not only helps you introduce your goods to the world but also helps you to contribute positively to the GDP of your country. Here are a few tips on how marketing can help you expand your export reach:

  • Spot the trend!

Remember, hope isn’t a catalyst for making sales. Research and marketing are! You should never invest in goods by just being under the impression that they will sell. The first step towards successful exporting is researching what your target audience wants. Next, it is important to identify the right platforms where there is a potential demand for your goods to sell or where you can create the demand easily.  Thus, marketing your goods in the right manner can not only help catch the buyer’s eye but also aid in creating a need for your product in the market.

  • Making a Sale vs. Supporting a Buy!

People don’t buy what you are selling. They only buy what they want to buy. When investing in a product to export, always remember that investing in something the buyer wants to buy is far more superior than investing in what you want to sell. You must be prepared to customize your product as per the buyer’s requirements in order to ensure your sales numbers are always on the rise.

  • Step into the Shoes of your Potential Buyer!

To understand what a buyer needs, you must step into the shoes of the buyer. Ask yourself questions faced by them. For instance, what are the problems most frequently encountered by your potential buyers? How can your product solve these problems? Who is selling or trying to sell similar products to them? In other words, who are your competitors in the market? What channels are these sellers using to reach your potential buyers? Once you have answers to these questions, marketing strategies will become much simpler to develop.

Basically, at the crux of the matter, the ROI depends on how well you market your product and not just pay attention to its making, which is also of paramount importance. Money begets money. Likewise, customers also beget customers through word of mouth. Apart from referrals, there are umpteen number of ways that need to be explored to grow your audience base, which targets new buyers. This is where marketing strategies come into play and can help you grow your business in leaps and bounds.

How to Get Your Business Export-Ready?

True, the world of export-import offers an abundance of opportunities. It enables you to scale up your business and grow it in leaps and bounds. The exim world is indeed very thrilling and its revenue-generating strategies can multiply your fortunes overnight.
However, while it is great to foray into this export import zone, have you considered the following to make your move fool-proof?
Here are some essential elements you need to undertake before you can set sail on a successful export import expedition:
1>  Export-Import Market Research
Based on your product, research the most prospective target countries, their economies, and the corresponding markets. The approach is aimed to find you the number of potential clients in those countries. This is a precursor to establishing financial targets and understanding the ROI in international growth. In addition, it is also important to be in the know-how of the demography, political environment, industry legislation, the culture, the local and global competitors in the region, the customers’ behavior, the networking among the suppliers, distributers and the infrastructure in general. The above research is much needed to ascertain how best your product or services can cater to the needs of the clients in the respective markets and give you the competitive edge.

2> Realistic Target Setting
Once done with the research, you know exactly how many clients you have abroad. Now, you will need to set a price for your products so that you can make a realistic estimation of the market share that you will subsequently rake in. So how do you calculate the price? One of the main strategies for calculating the export price is as follows:
Given all components in place, Price * the number of products * the share of clients that you target = Your target, which you will compare with projected costs of international expansion needed to calculate ROI.

3> The 4-Step Game Plan

(a) SALES PLAN: There are standard ratios of sales planning that are applicable to both domestic and international sales, regardless of B2B or B2C sales. Calls (via ads, emails, visitors) that lead to appointments and appointments, which convert to sales, account for the growing domestic sales statistics. Additionally, as selling of your product overseas involves knowledge of foreign languor, culture and behavior, the sales plan must necessarily reflect a learning curve.

(b) PRODUCTION PLAN: Based on how many products you intend to sell, you will know how many you have to produce. This includes the inventory as well. Having sorted this, you now need to figure how much manpower and what kind of equipment you will need to manufacture the products. For the services industry, a similar approach based on the number of hours need to be worked out.

(c) MARKETING PLAN: With all the learning garnered from the export-import market research – now formulate the marketing strategy. There are often state specific requirements for the product. These include labelling, packaging and different compliance requirements. Besides, you will need to identify the best marketing and sales channels for each of the markets.

(d) ACTION PLAN: Once the meticulous research and market scrutiny is done, the work has been well planned. Thus, at first, we plan the work and now it is time to work on the plan. Start planning activities that involve finding partners, buyers etc. Attend different trade shows to gain exposure. Develop goals to attain your long-term export goal. To achieve this, your performance indicators become your targets that keep you on track and ensure that you are correctly toeing the blueprint of success that you have strategized.

So, do you think your business is export-ready?