Pricing products or services may not be such an easy task - there are many issues to consider. In the case of imported products it becomes even more complicated, since a much more detailed analysis will probably be necessary than merely the profit margin and product costs.
Although price setting is essentially a mathematical task, much of the success of a business, as well as its long-term financial viability, is associated with how the sales price is calculated. It is worth remembering that, in the case of imported products, the rates, taxes, freight and some other values should be weighted at the time of pricing.
Let's look at some points you need to consider when pricing imported products. Check them out!
There are two basic ways of calculating the sales price of a product, one on the basis of costs or through analysis of market values and competitors' prices. You must be asking yourself the following question: What is the best way? The answer is simple: Both are correct.
Many entrepreneurs end up adopting the pricing method just by calculating their values, which is considered very risky, since it is not also applying the value practiced by the market and competitors - charging an amount out of reality or that does not match the purchasing power of its consumer.
On the other hand, the chance that entrepreneurs may end up making a mistake by considering only the market value, since the embedded values regarding production costs were not also considered, may generate a real loss in the boxes and weaken the company's health.
Ideally, you should find a balance between these two types to calculate the price of your product efficiently and appropriately.
Both direct and indirect costs should be listed when pricing any product. Generally, they are composed of four points of relevance:
In order not to make mistakes when pricing an imported product, here are some issues that cannot be left out.
The route the product takes, from the production site to the company, requires at least three different freights:
It is necessary to be aware of the displacement of the product, making sure that during the journey no physical damage will be caused to it. If the product has a high added value, it is ideal to make sure that the purchase will not be impaired.
Insurance is a great alternative to these kinds of contingencies. But you must be aware that they do not always cover any type of damage presented by the products. With a good insurance policy, profit margins can grow without the consumer being harmed by the increase in the final price.
For those who want to offer a difference in the market compared to competitors, the technical assistance offered can make the product more attractive in the eyes of the customer in the long term. However, adopting this type of consumer protection can cause an additional cost that must also be taken into consideration when pricing imported products.
It is worth mentioning that not all imported products have technical assistance, since they are not all those belonging to the major international brands. The great advantage in this case is to enable the company's own technical assistance, as in the case of a Call Center - where customers can mail the products to the physical address of the store.
It is necessary to estimate all the expenses that may be incurred in offering these additional services, thus including them in marketing costs. With this, customers with or without a warranty, may have an extra service when calling the technical assistance.
The delimitation of the target audience is of great importance in establishing the profit margin. One must think that when pricing imported products, if the added value is high, the profit margin will also be high.
A good example is the customised and exclusive products, where the price trend is higher, making the profit margin higher as well.
However, if the intention of importing a certain product is to massify it, it must have a high turnover of stock, in addition to a good relationship with suppliers to be able to meet the demand.
Whatever your choice, you need to combine pricing with your costs and the value offered by the market, always checking prices for similar products with that of your business - an effective way to cut costs and provide a fair value to the consumer.
It is important to take into account that imported products have a number of peculiar characteristics - one of them is that the value expressed on the invoice (in the case of products) is not the total cost of importation, but rather the value that will serve as the basis for calculating the Tax on Transactions relating to the Movement of Goods and Services, the ICMS. In the total value, in addition to the costs of imported products, will also be included the value of taxes: II, IPI, PIS and Cofins, Siscomex rate, freight and insurance.
Banking and storage fees, brokerage services, shipping and many others are not included as a basis for calculating ICMS, appearing only when it is necessary to identify the total cost of the import performed. All these taxes, fees and other charges should be thoroughly analyzed and included in the calculation of the pricing of imported products, enabling the business and allowing the application of a fair price to the market.
What do you take into consideration when pricing imported products? Share your experience with us in the comments!