Other associated costs could be research into international markets, international communications, and production of export literature including translations.Īgriculture has proven to be a viable source of foreign exchange earnings and the opportunity remains bigger for more players to tap. In terms of negotiating the terms of sale, considerations should include the amount of payment and the need for protection, terms offered by competitors, practices in the industry, capacity for financing international transactions among others.įor international exports, costs should consider, freight, travel to overseas markets, promotional costs, import duties and taxes. ![]() It is important to be very clear about the obligations for seller and buyer, by spelling out where ownership is transferred between an exporter and the importing party. The terms include free carrier (FCA), free alongside ship (FAS), free on board (FOB), cost and freight (CFR), delivered duty paid (DDP) and delivered duty unpaid (DDU).Īlso, an exporter can achieve better pricing by negotiating best rates from service providers, be abreast of exchange rates, periodic review of cost elements, inclusion of appropriate currencies and harmonised commodity description codes and minimum order quantities. Incoterms are the internationally accepted standard definitions for terms of sale set by the International Chamber of Commerce (ICC) since 1936. The council encourages that while export-related and associated costs are covered, an exporter should be able to identify break-even points, set realistic profit margins and familiarise with INCOTERMS 2010 for pricing purposes. But doing does not mean that an exporter should ignore the competitiveness of pricing. ![]() Both methods have their strengths and weaknesses, implying that export calculations need to combine both methods for optimum export pricing balance.
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