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What's It Worth?

The science of pricing your exports

One of the most difficult aspects of taking your business international is pricing products. According to Marcia Youel Smith, president of Reston, Virginia-based Columbia Cascade Inc., which produces software used by associations, educators and government agencies to calculate export pricing, international pricing is a two-step process.

First, find a base price that takes into account the additional expenses you incur just by crossing borders. These include:

  • international market research;
  • export distribution fees and sales commissions;
  • international advertising and marketing;
  • translation;
  • product modifications to comply with international standards;
  • packaging that meets export requirements;
  • and export consulting, accounting and legal fees.

Then, once you have a specific international customer to quote for, you have to consider the costs particular to getting your goods to that company, such as:

  • shipping and handling (packing, marking, labeling, consolidating and containerizing);
  • preparing export documents, certifications and licenses;
  • compiling export shipment documents;
  • insurance certifications and policies;
  • dangerous/hazardous materials declarations and certifications;
  • and freight-forwarder, consignee, customhouse-broker and/or consulate fees.

"Pricing can be a confusing task," Smith concedes, "but you get better at it once you're familiar with all the factors."

Christopher D. Lancette is an Atlanta-area freelance journalist who covers international business fora variety of local, national and international publications.

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This article was originally published in the November 1999 print edition of Entrepreneur with the headline: What's It Worth?.

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