How to Price Your Export Products – A Beginner’s Guide from India
📍 Introduction
Pricing your export product correctly is one of the most critical decisions you’ll make as an exporter.
Price too low — you risk losing money.
Price too high — you may lose the deal.
In this blog, you’ll learn how to build your export price step-by-step, factoring in production costs, overheads, logistics, taxes, and your target profit — all while remaining competitive in the global market.
💡 Why Pricing Strategy Matters
✅ Determines your profitability
✅ Helps win international buyers
✅ Affects your ability to scale and invest
✅ Influences how you’re positioned in your target market
📦 Components of Export Pricing
Here’s what your export price should ideally cover:
1. Cost of Production
Includes:
- Raw material cost
- Labor/wages
- Packaging
- Electricity & utilities
2. Overheads
- Admin expenses
- Marketing costs
- Quality control
- Salaries and office expenses
3. Logistics & Shipping
- Inland transportation (from factory to port)
- Loading & warehousing
- Freight charges (sea/air)
- Customs clearance charges
- CHA/freight forwarder fees
4. Taxes & Duties
- Export duties (if applicable)
- GST (zero-rated but may affect cash flow)
- RoDTEP/other scheme benefits (adjusted in pricing)
5. Insurance
For CIF, CIP, or other terms involving insurance:
- Marine insurance cost
- Buyer-specific liability coverage
6. Banking & Finance Costs
- Letter of Credit confirmation charges
- Forex margin or conversion losses
- Interest on pre/post-shipment finance
7. Desired Profit Margin
Always add a profit margin based on:
- Industry standard
- Risk level
- Target buyer profile
- Market competitiveness
🔍 Consider INCOTERMS in Your Price
Your pricing will vary based on the INCOTERM you quote.
Example:
| INCOTERM | You Pay For: | Risk Transfers At: |
|---|---|---|
| EXW | Nothing beyond your factory | Factory gate |
| FOB | Local transport + port charges | Ship at port |
| CIF | Everything incl. sea freight & insurance | Destination port |
| DDP | Everything incl. customs & final delivery | Buyer’s doorstep |
🧮 Export Price Calculation Formula (Example)
Let’s say you’re exporting cotton shirts:
Cost of Production: ₹150
Overheads: ₹20
Packaging: ₹10
Local Transport & Loading: ₹15
Freight (FOB): ₹25
Banking Charges: ₹5
Profit Margin (15%): ₹34.5
➡️ Total Export Price (FOB): ₹259.5
You can round it to $3.15 FOB India (based on conversion rate).
🧠 Pro Tips for Export Pricing
✅ Always price in USD or buyer’s currency
✅ Keep buffer for currency fluctuation (2–3%)
✅ Research competitor prices using platforms like Alibaba, IndiaMART, TradeIndia
✅ Offer volume discounts to attract long-term buyers
✅ Avoid underpricing — it’s hard to raise prices later
📥 Coming Soon:
🎁 Free Export Pricing Worksheet (Excel Format)
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🔗 Explore more tools & downloads → [Visit Export Resource Hub]
