Getting your pricing right

Your checklist

Set your export price

Setting your export price is a combination of ensuring you cover your costs, maximising your sales in each EU market, and generating the required margin/profit from those sales.

Be clear on your export price before you enter your selected EU markets to ensure you are able to quote and price for business effectively.

Your pricing should be informed by researching rival prices in the market to ensure your product or service is competitive. 

Take into account how you wish to approach the market – for example, will you offer credit terms or bulk discounts which may affect your cash flow? Should this be reflected in the price, and do you need to capture or account for delivery costs to the market within the price?

You also need to decide if you will quote/price in Euros. If so, what are the Euro price points for your product or service?

Know your costs

Selling your goods and services into EU markets will incur additional costs you need to be aware of. You'll know the costs of production or service delivery for your domestic market. Also consider any additional costs, accounting for your final export pricing. 

These can include:

  • Research, marketing and market visits to the selected EU markets
  • Packaging, labelling and translation costs
  • Adapting your product or service for the market
  • Logistics and insurance costs
  • IP protection for EU markets
  • Agency or partner fees/commission
  • Exchange rate fluctuations between the Euro and Sterling

Decide on how much of these costs you will incorporate into your final export price to ensure you still make a profit on your export sales, when all your costs are accounted for. 

You may want to consider minimum order sizes for the EU market to keep your costs competitive.

Consider using a cost-based pricing model

A cost-based pricing model is based on:

  • The fixed and variable costs in manufacturing your product or delivering your service
  • Plus the additional export costs you will incur
  • And then deciding on the margin you require from your EU sales to come up with your final export price

Consider using a market-based pricing model

A market-based pricing model is mainly based on:

  • Researching the market to look at competitor prices and the anticipated market and customer demand
  • Then price your product or service competitively to maximise sales from the market

The majority of products and services for EU markets will use a combination of cost-based pricing and market-based pricing modelling to achieve the optimum export price. This will deliver good sales and margin, and ensure your costs are covered.

Get the right support and advice

Need help to set your pricing?

The final export price you decide on will ultimately depend on the individual product or service and the market demand for it. 

Advice and guidance in coming to a final decision on your export pricing may be available from:

  • Your export adviser
  • Your bank or accountant
  • Your export partner
  • Your trade association
  • Country market research reports (in terms of pricing levels and terms of trade)
  • Online stores serving the EU markets (to allow price comparisons)   

Contact us

Ask our export advisers about preparing an export plan.

Disclaimer

All information provided on this web page is for general guidance only. The contents of this guide have been provided by our training partners, Upper Quartile. Upper Quartile is not affiliated with any of the third parties or listings represented on our website. Third party listings are drawn from public domain and industry body data sources. Due diligence on a given third party or listing remains the exclusive responsibility of the end user. Whilst every effort is made to ensure the accuracy of the details represented, Upper Quartile and Scottish Enterprise cannot endorse, recommend or accept responsibility for any transactions conducted between the user and a given third party or listing provided on this web page.