Before slapping a price tag on your company's best-selling product for a foreign market, it pays to scrutinize the transportation costs associated with delivering goods overseas. After such costs are layered onto the price of your product, it may no longer be competitive in the marketplace.
Transportation rates vary widely, depending on such factors as routes, space availability, the type of freight being transported, its volume, the regularity of shipments, and insurance costs. That's why it's best to quote prices "delivery ex-works" (delivery excluded).
"When it comes to delivery, ask customers what kind of shipment they prefer. If delivery charges price your product out of the market, take a stab at trying to find a more competitive rate for the customer," says Spencer Smith, general partner of Business Books Network, an international rep and distribution firm in Dover, N.H. If your company is new to the international market but your customer regularly imports from other companies around the world, it may make sense to piggyback on a transportation network already in place, Smith adds.