Export pricing: build a quotation you can explain

Define the unit and the order

Choose a sales unit that the buyer understands and link it to a specification. If the unit is a carton, state what is inside. If the product has variants, identify the variant the price covers. Ambiguity here can survive several rounds of negotiation and emerge as a dispute after delivery.

Separate recurring unit costs from order-level costs. Product adaptation, artwork, testing or preparation may not change proportionately with volume. Treating these as an invisible percentage can make a small trial order appear more profitable than it is.

Use a worked example without mistaking it for a market rate

Imagine 1,000 units cost 8,000 in production and packaging, with a further 1,000 in order preparation. Before other commitments, the cost is 9 per unit. A 500-unit order with the same preparation charge has a higher unit cost. These are fictional figures to explain the method, not a benchmark for any product or route.

With a cost of 9 and a selling price of 12, the difference is 3. That is a 25% gross margin on selling price and about a 33% markup on cost. The two percentages answer different questions. Neither is net profit when other relevant business costs remain outside the calculation.

At a glance

Build a clear export quotation

Work through the checks. Keep unknowns visible before making the next commitment.

Make delivery and payment part of the calculation

Name the agreed delivery place and explain which costs each party carries. If a trade term is used, specify the agreed rule and version and obtain specialist clarification where needed. A shorthand term does not settle every issue of payment, ownership or contractual responsibility.

Include the cash implications of the payment schedule. A longer interval before payment can require more working capital. Freight, insurance, destination charges and taxes should be checked for the actual product and transaction; do not copy a figure from an unrelated shipment. Record quotation validity and unresolved estimates.

Give the quotation a version and a boundary

A clear proposal has a reference, date, validity period and scope. When assumptions change, issue a new version. Your production team, sales contact and buyer should be able to identify the same offer.

• Product specification, unit and order quantity.
• Currency, unit price and order total.
• Preparation lead time and agreed delivery point.
• Payment schedule and quotation validity.
• Included documents, exclusions and items awaiting confirmation.

Respond to price objections with a comparison

Ask what specification, quantity and delivery conditions the competing offer includes. A discount may be appropriate, but it should follow a decision about value and economics. For an initial review, prepare an anonymised quotation and the cost information you already hold. Leave missing figures visible; replacing them with guesses does not improve the decision.