Pricing Products for Export 

Courtesy of International Trade Administration

As in the domestic market, the price at which a product or service is sold directly determines your company’s revenues. Your firm’s market research should include an evaluation of all variables that may affect the price range for your product or service. If your company’s price is too high, the product or service will not sell. If the price is too low, export activities may not be sufficiently profitable or may actually create a net loss. 

Pricing Considerations

As you develop your export pricing strategy, these considerations will help determine the best price for your product overseas:

Key Elements of Pricing Analysis  

Foreign Market Objectives

An important aspect of your company’s pricing analysis is the determination of market objectives. For example, is your company attempting to penetrate a new market, seeking long-term market growth, or looking for an outlet for surplus production or outmoded products? Marketing and pricing objectives may be generalized or tailored to particular foreign markets. For example, marketing objectives for sales to a developing nation, where per capita income may be one-tenth of that in the United States, necessarily differ from marketing objectives for sales to Europe or Japan.


The actual cost of producing a product and bringing it to market is key to determining if exporting is financially viable.  
Other costs should be assessed for domestic and export products according to how much benefit each product receives from such expenditures, and may include:
After the actual cost of the export product has been calculated, you should formulate an approximate consumer price for the foreign market.

Market Demand  

For most consumer goods, per capita income is a good gauge of a market’s ability to pay. Some products (example, popular U.S. fashion labels) create such a strong demand that even low per capita income will not affect their selling price. Simplifying the product to reduce its selling price may be an answer for your company in markets with low per capita income. Your company must also keep in mind that currency fluctuations may alter the affordability of its goods.  


In the domestic market, U.S. companies carefully evaluate their competitors’ pricing policies. You will also need to evaluate competitor’s prices in each potential export market. If there are many competitors within the foreign market, you may have to match the market price or even underprice the product or service for the sake of establishing a market share. If the product or service is new to a particular foreign market, however, it may actually be possible to set a higher price than is feasible in the domestic market.

Pricing Summary 

It’s important to remember several key points when determining your product’s price:  

Independent Representatives & Distributor

Pricing Products for Export

Time to Market and Costs of Export

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Advantages & Challenges of Exporting

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