Creating Your Export Plan Sec 4 Part 1

Source Google

Export Readiness:

Utilizing Technology for Successful Exporting

 SBA

Section 4 Part 1

Ecommerce Tools, Equipping Your Business With technology

Worksheet: Technology Tracker

Exporting today is easier than ever before. This is largely due to advances in technology. In many ways, e-commerce–the buying and selling via electronic systems–enables you to do business with customers across the globe nearly as easily as with those across town.

E-commerce offers major advantages to you as a small business exporter. These include quick and easy access to tremendous amounts of information, and the ability to sell goods and services virtually anywhere in the world.

You are likely already utilizing e-commerce for your domestic business. But if not, this brief overview will introduce a new way of doing business and explain how you can use e-commerce to your advantage.

Key Elements of E-Commerce:

Online presence for your company (a website)

• Providing information in your target market’s native language(s)
• Key words embedded in your website, so that your company is found by online search engines
• Credit card processing

There is one caution for start-up exporters who plan online sales and ...

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MORE INFORMATION

4 Essential eCommerce Strategies for Manufacturers and Distributors

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Exporting: The Definitive Guide to Selling Abroad Profitably

Why Put it Off Any Longer?

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Export Readiness Creating Your Export Plan Sec 3 Part 6

Export Readiness:

Costing, Financial Forecasting and Product Pricing

 SBA

Section 3 Part 6

Methods of International Pricing

Worksheet Setting Your Price

Setting Terms of Sale

Price Quotations

The pro forma invoice is the most commonly used document to give price quotations to potential customers. If you and your buyer are in agreement, it is usually considered a binding sales contract, although prices may change prior to final sale.

• To prepare the invoice, you should give a detailed description of the product and an itemized list of fees and terms of sale.
• Prices should be quoted in U.S. dollars to reduce foreign exchange risks.
• The invoice also should indicate the period during which the price quotation is valid, the terms and method of payment, and delivery terms.

You should be familiar with the common terms of sale used in international trade before preparing your pro forma invoice. International Commercial Terms (INCOTERMS) are universally recognized in export and import contracts. These terms refer to the rights and obligations of each party, such as who pays ...

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INCOTERMS® — International Commercial Terms — are three-letter trade termsdeveloped by International Chamber of Commerce and widely used in internationaland domestic contracts for the sale of goods. They're accepted by governments and shippers worldwide, and are used to prevent uncertainty or misunderstandings.

SHAYER.COM

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INCOTERMS or International Commercial TERMS Explained 

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Terms of Sale | Different types of Quotations in International Trade

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Controlling the Terms of Sale

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Why Put it Off Any Longer?

ICANetwork

CREATING YOUR EXPORT PLAN Section 3 Part 5

Source Google

Export Readiness:

Costing, Financial Forecasting and Product Pricing

 SBA

Section 3 Part 5

Methods of International Pricing

Worksheets > Sales Forecasts—First Five Years > Cost of Goods Sold—First Five Years > Export Costing > Marketing Expense Costs > Projected Income—First Five Years in All Markets > Setting Your Price

In Section 3 – A, B, C, and D – We covered International Payment Methods. Section 3, Part 4 – We began to look at Methods of International Pricing and the different options for consideration related to your international pricing.

• The “cost-plus” method of international pricing is based on your domestic costs, “plus” additional exporting costs associated with international sales and promotion, product modification, etc.
• We looked at how the “marginal-cost” method will likely provide a more realistic means of determining true cost of producing your product for export.
• On variable costs, we looked at what should be considered
• After-Sales Service Costs Product warranties and service

The conclusion was that overall, no single strategy is ideal for every company. As a result, it’s common to draw upon a mix of options for each market or product.

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mar·gin·al cost

the cost added by producing one additional unit of a product or service.

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Marginal Cost Of Production Definition | Investopedia

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Average and Marginal Cost - Boundless

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ICANetwork

CREATING YOUR EXPORT PLAN Section 3 Part 4

Source Google

Export Readiness:

Costing, Financial Forecasting and Product Pricing

 SBA

Section 3 Part 4

Methods of International Pricing

There are different options for consideration related to your international pricing. Cost-Plus Method The “cost-plus” method of international pricing is based on your domestic costs, “plus” additional exporting costs associated with international sales and promotion, product modification, etc.

Remember: costs associated with insuring or deliveries are usually “pass-through costs” that do not have a markup component in arriving at a selling price.

• The cost-plus method allows you to maintain your domestic profit margin percentage, and thus to set a suitable price.
• Any costs not applicable, such as domestic marketing costs, are subtracted from the overall cost prior to markup to arrive at your selling price.
• This method does not take local market conditions into account.

With cost-plus pricing, different marketing costs and/or modifications to the product could change the cost basis dramatically, making the product either more or less costly for export.

Source Google

Marginal-Cost Method

The “marginal-cost” method will likely provide a more realistic means of determining true cost of producing your product for export.

To use the marginal-cost method:

• Determine the fixed costs, if any, of producing an additional unit for export. Fixed costs are costs that occur whether or not you are selling anything. For example: mortgage payments on land or buildings. — If your company is operating at a profit, and additional assets are not being used for exporting, then fixed costs have been covered.
• Any additional costs of producing products for export are termed variable costs.

There may be instances where additional ...

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Cost Plus Pricing - AccountingTools

Cost plus pricing is a cost-based method for setting the prices of goods and services. Under this approach, you add together the direct material cost, direct labor cost, and overhead costs for a product, and add to it a markup percentage (to create a profit margin) in order to derive the price of the product

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Cost Plus Pricing 101: The Necessities and Your Pricing Strategy

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How to Determine the Mark-Up on Cost-Plus Pricing | Chron.com

ICANetwork

CREATING YOUR EXPORT PLAN Section 3 Part 3 D

Source Google

Export Readiness:

Costing, Financial Forecasting and Product Pricing

 SBA

Section 3 Part 3 D

International Payment Methods

This section of the export planning process also has a lot of detailed information. It will also be broke down into parts A,B, C  etc ...

First post the worksheets covered in Section 3 Part 3 A

• Sales Forecasts—First Five Years
• Cost of Goods Sold—First Five Years
• Export Costing
• Worksheet: Marketing Expense Costs

On the second post Section 3 Part 3 B we covered worksheets

• Projected Income - First Five Years In All Markets
• Sales Forecast worksheet
• Cost of Goods Sold worksheet

Section 3 Part 3 C we covered

The primary methods of payment for international transactions, ranked in order of most secure to least secure for the exporter, include:

1. Payment in advance
2. Letters of Credit

Today in Part D, we will finish the terms available for payment options

1. Documentary collections (drafts)
2. Open account

LC Terms and Conditions and Documentary Collections

With Non-Conforming Documents: Be Aware of Potential Dangers

1. Non-acceptance and non-payment by the buyer
2. Bank’s refusal to honor the presentation or seek approval from the buyer, and sending of the documents back to the beneficiary
3. Acceptance by the buyer, but delayed payment (could be up to six months or more)
4. Acceptance by the buyer, but negotiation of a lower payment price
5. Penalty for late shipment
6. Incurring of discrepancy fees
7. Settlement in court in a foreign country

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A documentary collection is a process, in which the seller instructs his bank to forward documents related to the export of goods to the buyer's bank with a request to present these documents to the buyer for payment, indicating when and on what conditions these documents can be released to the buyer.

en.wikipedia.org

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DOCUMENTARY COLLECTION Credit management World ***Difference between Documentary credit and Documentary Bill ICANetwork

CREATING YOUR EXPORT PLAN Section 3 Part 3 C

Source Google

Export Readiness:

Costing, Financial Forecasting and Product Pricing

 SBA

Section 3 Part 3 c

International Payment Methods

This section of the export planning process also has a lot of detailed information. It will also be broke down into parts A,B, C  etc ...

First post the worksheets covered in Section 3 Part 3 A

• Sales Forecasts—First Five Years
• Cost of Goods Sold—First Five Years
• Export Costing
• Worksheet: Marketing Expense Costs

On the last post Section 3 Part 3 B we covered worksheets

• Projected Income - First Five Years In All Markets
• Sales Forecast worksheet
• Cost of Goods Sold worksheet

On this post we are covering International Payment Methods 

Source Google

To succeed in the international marketplace, you need to offer your customers competitive payment terms and methods. As a small business exporter, your principal concern will be to ensure that your company gets paid in full and on time for each export sale.

• It does little good to make an export sale if your buyer delays payment so long that the financing cost eats up the profit.
• Foreign buyers have concerns as well, such as ...

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Describe the major agencies that facilitate international trade with export insurance and/or loan programs. In any international trade transaction, credit is provided by either the supplier (ex- porter), the buyer (importer), one or more financial institutions, or any combination of these.

cengage.com

What Are the Different Methods of Financing International Trade?

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Letter of Credit

a letter issued by a bank to another bank (typically in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.

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What's the difference between a bank guarantee and a letter of credit?

What Are the Different Methods of Financing International Trade?

ICANetwork

CREATING YOUR EXPORT PLAN Section 3 Part 3 B

Source Google

Export Readiness:

Costing, Financial Forecasting and Product Pricing

 SBA

Section 3 Part 3 B

Last post the worksheets covered in Section 3 Part 3 A

• Sales Forecasts—First Five Years
• Cost of Goods Sold—First Five Years
• Export Costing
• Worksheet: Marketing Expense Costs

This section of the export planning process also has a lot of detailed information. It will also be broke down into parts A,B, C  etc ...

On this post  we are covering worksheets

• Projected Income - First Five Years In All Markets
• Sales Forecast worksheet
• Cost of Goods Sold worksheet

Calculating Projected Income

You are now ready to assemble the data for your projected income statement. This statement will calculate your net profit or net loss (before income taxes) for each year.

Step 1: Fill in the sales for each year from the Sales Forecast worksheet.

Step 2: Fill in the cost of goods sold from the Cost of Goods Sold worksheet. Gross Margin for each year (sales minus cost of goods sold) will calculate automatically.

Step 3: Fill in the operating expenses specifically associated with the international marketing program for each year.

Step 4: Allocate your international division’s portion of the firm’s overall ...

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How to: set pricing in export markets

Explore options in pricing your goods and services for export