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Import and price point

  • Publisert 25.08.2014
With this tool, you can identify costs associated with distribution in your new market and discuss price points with your partner.

Even though you have a distributor to execute this task, it is important that you understand the most important steps in the process so you can set the price right and ensure expectations are aligned on responsibility for different costs.

 

The distributor will have varying degrees of control of the supply chain, from distributor to end user. Walking through the stages with your partner will yield important insights, not only on how much control your partner actually has but also in what stages you can improve different factors. Furthermore, it will give you insights into how the infrastructure works.

 

  • The vertical axis lists all the costs typically encountered when distributing in your new market such as transport, clearance, import duties, local taxes/VAT, and many others.
  • The horizontal axis is where you fill in your transportation/delivery chain. It should include all the stages your product undergoes from leaving your custody until it reaches the end user.
  • Discuss the distribution of costs along the value chain. Remember to discuss who will bear the costs. Import duties, etc., can be a very big expense.
  • Sometimes your partner will not want to be transparent about costs and markup. Explain that you are interested in understanding cost structure and setting the price right for each other’s mutual benefit.

 

 

 




 

 

 

"Inspection of goods and moving goods through customs is very complicated in China.  Rules change regularly and without warning and you will often pay unexpected fees. It is important to discuss all aspects related to moving goods and agree on which party pays which fees"
Mr. Zhou, Zanka Trading Company, China