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;
- 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.