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How to do Costing for Export?

The first step is to use the cost-plus method that determine the export pricing competitiveness of your products.

The Cost Plus Method of Calculation require a costing sheet so that it enable the exporter or manufacturer to:

Check that every expense has been covered in arriving at the selling price and provide a detailed record of the terms that have been quoted to the foreign buyer.

The items covered by the export costing sheet are:

1. Unit cost of Product -
The starting point in export pricing is the production cost per unit of the product. This would be the variable cost plus fixed cost or overhead.

2. Profit - Normally, profit will have already been included in the domestic price. However, if it is insufficient for the risk involved in selling abroad, an extra allowance for profit can now be added.

3. Agent's commission abroad - This is usually calculated on a percentage basis... Read More

    Secrets of International Trade


  Secrets of International Trade
A strategy is just a sophisticated name for a plan. You should have one basic plan for exporting.

Marketing Strategy for Export
A marketing research checklist should help a manufacturer organize its data. Promotion is the term used to describe marketing activities to persuade potential customers to buy.

  How to conduct Export Promotion?
Trade fairs
are often the most effective way to introduce products and find exactly what buyers think.

InCoTerms 2000
Specify relationship as an Independent Contractor and you cannot be held legally liable for actions an agent commit. Adopting General Standard Conditions is legally binding, whether or not both parties are aware of or understand, every provision.

Export Correspondence
Manners is personality -- the outward manifestation of a company or one's innate character and attitude.

How to Draft an Agency Agreement?
Working knowledge of a contract is essential. You could find yourself in legal hot water that even the best attorneys can't get you out. In business law an offer once accepted by the buyer, an export contract comes into being.


Secrets of International Trade

Responsibility for export Insurance - Such insurance might include war risk insurance as well as straight marine insurance. Very often, the exporter will quote a C.I.F. price to its foreign customer. This is an export price that includes the cost of the goods, the insurance and the freight, to a named point of destination.

If the quotation is accepted, the exporter will automatically be responsible for arranging the marine insurance. If it is stipulated that payment to be by letter of credit, the issuing bank in the foreign importer's country will insist on having marine insurance.

Even though the export price quoted is F.A.S. or F.O.B. Because the bank will wish to protect its own financial interest should the goods be damaged or destroyed in transit. Although your export price may be F.A.S. (free along side Incoterms 2000, named point of shipment), the exporter may still be responsible for arranging the marine insurance.

This would be so if the exporter has made it one of the terms of the "export sales contract". In this case, the cost of the insurance would be billed as a separate expense, additional to the F.A.S. or F.O.B. sales price.


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