COSTING AND PRICING OF GOODS OR SERVICES FOR EXPORT OR IMPORT, FACTORS TO CONSIDER

Costing is concerned with collecting and providing historical information about expenditures incurred in or attributable to a whole range of activities and products of enterprises.  

The computation of the actual cost of producing a product and bringing it to market or providing a service is the core element in determining whether exporting is financially viable.

The profitability or otherwise of any business, therefore, depends largely on the various costs associated with the business as well as the set price which must not only be acceptable to the market but must equally brings appreciable returns to the exporter.

BASIC RULES OF PRICING

• Know your cost
• Know your demand
• Know your competitors ( both local and foreign)
• Know your objectives

PRICING OBJECTIVE
Pricing objective is not only serving as a guide to exporter, but also a sine qua non to establishing an effective export price. Therefore, a good export price could be set up after a careful analysis of the following options:

• To meet a specific profit goal
• To maximize profit
• To capture a specific market share
• To gain the largest possible market share

EXPORT COSTING FACTORS TO CONSIDER

Product charges                   
   Cost per unit………………………………..
   Profit………………………………………..
   Agent commission…………………………
   Ex-factory , Ex-plantation, Ex mill………
   Fees, packing, inland freight
   Customs broker fees………………………
   Financing cost……………………………..
   Other charges…eg 0.5% NESS ………
   Export packing…………………………….
   Labeling / marking………………………..
   Inland freight to the Port…………………..

Other charges                   
    Specify eg Cold storage…………………

Port Charges ……………………………………
    Handling charges………………………….
    Wharfage or airport charges ……………..
    FAS………………………
    Loading charges……………………………
    FOB (Lagos)………………………………

Freight
    Charges on weight………………………….
          Ocean or air ………………………………….
          On Deck…………….Underdeck…………..
          Rate………………………………………….

Transport Insurance
         Coverage required
          Basis…………………………
          Rate………….
          CIF (London)…………………………………..

After considering these factors  you can close your deal.