Export – At what price to sell in China?
Calculate the price of our deals on merchandise in destination
One problem that often arises in companies that begin exporting is how to transform the price of your product in the domestic market, the price at which I would offer it in country of our buyers.
For sales outside the "Incoterms” most recommended are CIF (Cost, Insurance and Freight) the CIP (Carriage and Insurance Paid to), if it is containerized goods, i.e., Sunset at the port of destination country you choose our buyer.
To use a standard calculation escandallo, which is composed of two types of expenses: Expenses linear, are those that are loaded goods unit, ton is the, cubic meter, bottle, resma, etc., and expenses percentage, which are those levied, by a certain percentage, the selling price of the goods.
Assuming the cost EXW (Ex Works) Product, no commercial benefit whatsoever, We will be adding different linear costs, which are: Transportation to the port of loading, costs of handling and loading of goods, or container that carries, freight Maritime and unloading costs, or manipulation of the container in the port of discharge. On the other hand, in products that have to do packaging and / or special labeling also have to add this cost, thereby arrive at CFR value (Cost and Freight) at the port of destination of the goods.
Take for example the export of marble from Bilbao (Spain) a Tianjin (China)
LINEAR CHARGES:
Value of the goods Ex Works (in the quarry): 1.000 € tm
Loading and transfer to the port of Bilbao: 65 € tm
Port handling, loading and stowage: 15 € tm
Sea freight, Bilbao – Tianjin: 100 € tm
Tianjin port handling: 10 € tm
TOTAL CFR TIANJIN: 1.190 € tm
Now, There are a number of expenses that are charged on the sale value of the goods:
PERCENTAGE EXPENDITURE:
Benefit exporter: 15,00%
Insurance merchandise: 0,50%
Compressed. banking: 1,50%
Commission agent: 5,00%
Dispatch and unforeseen: 1,00%
TOTAL CIF TIANJIN: 23,00%
I.e., all costs represent the 23% selling price, then 1.190 € found above, will account for 77% (100 less 23) and whether 1.190 Are € 77%, the 100% it will be (1.190 € by 100 and divided by 77), which equals € 1,190 divided by 0,77 = 1.545,45 € per tonne. This is therefore the price of the goods in position CIF Tianjin, for commercial gain of 15% on the selling price after covering all operating expenses.
Finally, we should note that the buyer will ask for a discount, whose percentage will vary depending on the product and country to which it is intended Merchandise. So, if we want to reserve room for negotiation 10%, suffice to divide the price obtained for 0,90, following the same reasoning that we used to calculate the CIF, and have a bid price 1.717,16 €, which is what would have to offer.
For products that have additional costs will be enough to include them in paragraph linear percentage expenses or costs, depending on whether.
