Getting your pricing right

Setting your export price is a combination of ensuring you cover your costs, maximise your sales in each market, and generate the required margin/profit from those sales.

Be clear on your export price before you enter your selected markets to ensure you are able to quote and price for business effectively.

Your pricing should be informed by researching rival prices in the market to ensure your product or service is competitive. 

Take into account how you wish to approach the market – for example, will you offer credit terms or bulk discounts which may affect your cash flow? Should this be reflected in the price, and do you need to capture or account for delivery costs to the market within the price?

You also need to factor in currency considerations when setting the price points for your product or service.

You'll already know the costs of production or service delivery for your domestic market. But selling your goods and services internationally will incur additional costs you need to be aware of.  

These can include:

• Research, marketing and market visits to your target markets
• Packaging, labelling and translation costs
• Adapting your product or service for the market
• Logistics and insurance costs
• IP protection
• Agency or partner fees/commission
• Exchange rate fluctuations

Decide on how much of these costs you will incorporate into your final export price to ensure you still make a profit on your export sales, when all your costs are accounted for. 

You may want to consider minimum order sizes for particular markets to keep your costs competitive.

A cost-based pricing model is based on:

• The fixed and variable costs in manufacturing your product or delivering your service
• Plus the additional export costs you will incur
• And then deciding on the margin you require from your international sales to come up with your final export price

A market-based pricing model is mainly based on:

• Researching the market to look at competitor prices and the anticipated market and customer demand
• Then price your product or service competitively to maximise sales from the market

The majority of products and services will use a combination of cost-based pricing and market-based pricing modelling to achieve the optimum export price. This will deliver good sales and margin, and ensure your costs are covered.

Need help to set your pricing?

The final export price you decide on will ultimately depend on the individual product or service and the market demand for it. 

Advice and guidance in coming to a final decision on your export pricing may be available from:

• Your bank or accountant
• Your export partner
• Your trade association
• Country market research reports (in terms of pricing levels and terms of trade)
• Online stores serving your target markets (to allow price comparisons)