You might think it’s easy to figure out the right price to sell your export product at, right? However, setting your export pricing could be one of the most challenging – and crucial – decisions you take when you begin your export business. Get yourself connected with import export course online and understand how you can fix the price of your product. When you are selling something in your own country, setting a price isn’t as difficult, but selling in another country requires a lot more thought and consideration. You also need to set a price that helps you stand out from your competitors. Market prices do not necessarily reflect the true value of your product. There are multiple factors to consider when determining final prices for a product, including manufacturing cost, compliance, packaging, the cost of competitors, importing countries’ tariffs, and supply chain and logistics. As you will bear all these costs until they are passed on to the buyer, you will have to add these up. In the case of a more competitive price, handling repeat orders can be a major issue if you’re new and not prepared. On the other hand, you can leverage the situation by offering a range of products.
Here are some of the Pricing Strategies that are followed:
1 Market Driven Pricing-
You utilize this strategy when you need to keep your product’s price flexible and responsive to such factors as demand, supply, inflation, etc. This is especially beneficial for commodities found in stable and established markets. Yet, one must be careful to not expose a product to too much market volatility as this can lead to price instability.
2 Skimming Pricing-
In skimming pricing, you raise your price to recover initial costs and make high profits, then decrease it to increase market share. Commodities in established markets benefit from this model, while customers in new markets might not be as eager to pay high prices at first.
3 Penetration Pricing-
This is a practice of charging a low price to gain a place in the market and eliminate competition. It is particularly effective for items of mass consumption that are commonly utilized.
4 Marginal Cost Pricing-
Exporters should use marginal cost pricing when they consider only direct and variable costs when establishing prices. It is possible to adopt marginal cost pricing if you are not planning to recover fixed costs from sales and shipments, but this will mean a longer breakeven and profit cycle.
5 Competition Based Pricing-
As a variant of market-based pricing, it is useful in markets with price leaders. Under this model, followers fix their prices to match the leaders. It is relatively straightforward, but you are threatened by sudden changes to the leader’s price.
6 Pre- Emptive Pricing-
Pricing pre-emptively may mean setting your price lower than the cost of the product, with the expectation that market dominance will result in profits over time. It is a high-risk strategy, but if correctly managed, it can lead to market dominance and virtual monopolies.
Conclusion-
To stand out, it is important to add something special to your product that is not available anywhere else. You need to study the market to understand the competition. Import-export business training in Hindi will explain to you the pricing strategies in detail and Digital Exim can help you start or grow your business in just 60 days. Join our free webinar to learn more about export. https://chat.whatsapp.com/Bqz4SWH55nSGtKj3GnJAC8 Do give us a visit
