You guide to export pricing, method of payments, and funding opportunities

You guide to export pricing, method of payments, and funding opportunities

This is Part 2 of You have to know the export essentials for your businesses series. For part 1 please see here: https://www.marcetable.com/2017/02/20/export-essentials-for-your-businesss-success-part-1/

Product Pricing

Setting up the right pricing strategies is crucial to the success of going global. Marcetable wants to share some of the key factors to set up yourself for success.

  • Developing a global pricing strategy
    • Can you limit products? (vs. selling your entire catalogue)
      • focus on core international products
    • Consider the margins and costs of all the intermediaries
    • Consider effects of parallel imports
  • Do not omit domestic products in your analysis, especially if they may compete with your exported products
  • Create an export price list
    • List only product available for export
    • Include, Part #, Description, Size, Case Qty., Case Weight, Case Cube, Case Per Pallet (Tie x High), Case Dimensions, US $ Price (each & case)
    • Minimum order quantity
    • Trade Terms
    • Payment Terms: advance payment, U.S. Dollar Pricing
    • Specify weight in LBs or KGs, measurement in inches, or cm
    • Pricing subject to change vs. Pricing valid until date
    • May have several pricing based on who you are selling to
      • End User
      • Reseller(Retailer)
      • Distributor
    • Volume discount
    • Never start with your lowest pricing

International Methods of Payments

You guide to export pricing, method of payments, and funding opportunities

[Excerpt starts]

Cash In Advance

  • Terms: Buyer pays seller before goods are shipped or service performed
  • Applicable when: New relationships. Smaller Transactions.
  • Advantage to buyer: No advantage – pays prior to receipt of goods/services & documents
  • Advantage to seller: Eliminates risk of non-payment

Letters of credit

  • Terms: Bank makes payment at sight or future date when compliant documents are presented by seller as stated in L/C
  • Applicable when: When buyer’s ability to pay in uncertain or when required by law. When seller needs to use L/C as collateral for financing
  • Advantage to buyer: Provides reasonable assurance proper shipment is made prior to payment. May reduce price with reduced credit risk to seller
  • Advantage to seller: Substitute bank’s credit for buyer. Assures prompt payment against docs. Protects against country risk & cancellation

Cash against documents

  • Terms: Documents are exchanged through a bank for payment but without a bill of exchange
  • Applicable when: Ongoing businesses relationship. Transactions not requiring protection. Avoid L/C cost. Smaller shipments
  • Advantage to buyer: Delays payment until receipt of documents. Buyer can be financed by seller with use of time draft
  • Advantage to seller: Seller retains title of goods until payment if B/B is doc of title but w/o protection of bill of exchange

Open account

  • Terms: Buyer pays seller after receipt of an invoice at a specified time
  • Applicable when: high trust relationship
  • Advantage to buyer: Positive cash flow. Buyer delays payment until goods inspected &/or received
  • Advantage to seller: No advantage – Risk of nonpayment

Consignment

  • Terms: Buyer pays when goods are sold
  • Applicable when: Long term relations or sold to subsidiary
  • Advantage to buyer: No liability until products sold
  • Advantage to seller: none

[Excerpt ends]

Financing/Funding Opportunities

  • EXIM bank
    • Working capital guarantee
    • Supply china finance guarantee programs
    • Load guarantee & direct loans
    • Finance lease guarantee
    • Direct loans
  • SBA Programs
    • Export express loan program
    • Export working capital program
    • International trade load program

This is part 2 of You have to know the export essentials for your businesses. For part 1 please see here: https://www.marcetable.com/2017/02/20/export-essentials-for-your-businesss-success-part-1/. For more questions about opportunities in China, please contact us at info@marcetable.com.

Lisa11

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