= Selling price cost, insurance, freight (CIF)
+ Additional costs for full transport insurance
= Price ex ship (DES)
+ Costs of import clearance
+ UnBiblioteka oading, THC= Selling price ex works (EXW) + Transport costs from plant to place of loading (train/truck) = Selling price free carrier (FCA)
+ Transport costs from place of loading to shipping port + Unloading at harbour + Transport insurance to shipping port = Selling price free alongside ship (FAS)
= Selling price delivered duty unpaid (DDU)
+ Costs of customs duty
= Price delivered duty paid (DDP)
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3.3.1 FOB Price
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2
3.2 Pricing considerations
?Cost
?Cost of production
?Direct cost: material costs, labour costs, allocation of fixed costs, packing costs, etc.
? Capability of target market
? Referring to the consumption power, income level, supply and demand relationship
? The higher the capital income of the target market, the higher the price
unit
?A unit for measuring quantity:
yd, set
kg, gr, m/t,
?A certain trade term: FOB, CFR, CIF
?Examples:
?USD225.30/piece CIF New York
?FOB Guangzhou EUR12.80/set
? policies and regulations in aSpEIBaOrFtGDicUFuS lar market area
4
3.3 Calculation of price
Item Manufacturing cost + Export packaging (depending on mode of transport) + Profit margin – Discounts/rebates/volume discounts/sales commission
?Administrative costs: overhead
?Cost of sales
?Marketing costs: advertising, sales trip expenses, commissions intermediary services
?Cost of delivery
?Warehousing and transporting charge,
+ Storage costs, terminal handling charge (THC), loading onto ship
+ Costs for export clearance + Commission of port agent
Table 3.1 Costing Worksheet
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insurance premium, taxes and tariffs,
customs duties
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3.2 Pricing considerations
? Anticipated profit margin
? in an absolute number
? in a percentage → profit margin
+ Costs for documents (ie delivery order)
= Selling price delivered ex-quay (DEQ)
+ Land transport costs to nominated destination
+ Full transport to destination
? Payment terms
? The lower the financing charges, the higher the risk of payment
? Other factors to be considered
? foreign exchange rates
? international market price for similar products
Chapter Three
Export Price
3.1 Expression of export price
?Four components in a standard format of a price:
?A code of currency: USD, CAD,CNY, EUR, GBP
?A number indicating the price
Sub-Total
Total
5
3.3 Calculation of price
= Selling price free on board (FOB)
+ Freight to port of destination
= Selling price cost and freight (CFR)
+ Insurance