What about international pricing? (and before we get into that, a little business model talk)
I am wondering about pricing for international customers!
I know, it’s troubling, isn’t it?
I have searched the Internet, but there are no examples of other companies, and I can’t find any information that would be helpful.
I’m not sure if we are just talking about the cost of trade, which is simply the domestic sales price plus international shipping costs, or if we need to consider something else.
The cost of international support depends on the level of each company’s purely domestic specifications.
It’s a nice reminder!
In fact, the cost of trade alone is not enough.
If you don’t take this into consideration, you may end up making a small profit even if you export your products.
Right?
I had to make a decision quickly, but I couldn’t set a price and was struggling in circles.
You were worried about that,
You should have told me.
But I don’t think that’s a decision that can be made at the level of the person in charge.
I don’t have that much authority, but…,
No, it’s not,
The question is how much of the cost should be tied to the international price.
Yes.
International prices are based on international business models.
While changing specifications for international markets is one aspect of international support, there are many other factors that affect pricing for international markets. Therefore, pricing for international markets is not that easy.
Depending on the extent to which the company and its products are not currently compatible with international specifications (i.e., are they still domestic), the initial costs required for international support will also vary.
However, if the business model for the international market is fixed, it would be easy to assume international prices.
(If you have an international business model?)
The business model for the international market has been finalized, which means that the following costs have been roughly calculated.
In the case of export; –
・International Intellectual Property Rights
・Compliance with international environmental regulations
・Compliance with international distribution regulations
・Support for international business practices
・International language support
・Cross-cultural response to international (including fascination)
In the case of overseas investment; –
(in addition to the “cost of exporting” mentioned above)
・Compliance with international laws and regulations
(…)
Initial investment costs for international expansion are surprisingly high.
The cost for each of the above factors may be several hundred thousand yen or several million yen, depending on the product and the country.
For example, if it is the first time for a company to expand internationally, in terms of the order of “influencing factors” mentioned above,
・Foreign Application Fees
・Compliance with UL standards, CE marking, etc.
・Compliance with licensing applications, labeling, etc.
・Correspondence regarding insurance, credit information, contracts and guarantees, etc.
・Multilingualization
・Cross-cultural support (product and service specification changes, new website construction, etc.)
This means that there will be initial costs such as
…
Yes.
The reason why it costs several hundred thousand yen to several million yen is that while there are cases where only one solution “for international” is required, there are also cases where “support for each country” is needed.
In reality, however, due to time and cost considerations, we often expand into one international country at a time, rather than simultaneously into multiple countries in the first year.
This is one of the most efficient ways to proceed, as the sales and profits achieved in the first country are used to cover the costs of the next expansion.
Important,
・Know in advance the costs of international correspondence.
・Still, the decision to pursue international expansion must be made.
It is.
It is really difficult for a company to expand internationally and then find out later in the process that it does not have enough international support and that it needs to pay for it.
We receive a variety of inquiries without knowing how much money we will need to spend in the future, but we sometimes let the more challenging but more promising projects slide, or we push into the red ocean simply because it costs less.
If you do not know the overall cost of the project in advance, it is impossible to make the right choices for business development.
In fact, there are quite a few cases where exporters give up exporting halfway through the process because they cannot raise the costs.
We do not want to leave in the middle of the program.
Yes, that’s right.
Distribution prices vary by commodity and country
Distribution prices vary by commodity and country
So far, we have talked about the cost of “preparing” to sell internationally.
Next to “Preparation,” the actual “Price at Sale” needs to be calculated.
When you say pricing, it really depends on how many companies are in between.
Yes.
Local distribution costs, shall we say?
How much is the local agency or partner’s share?
Each price, multiplier, etc. until it enters the wholesaler or retailer,
(You don’t know that.)
Once these are known, the price for the international market can finally be determined.
However, distribution pricing varies by merchandise and by country.
Accordingly, in the form of a list,
・Distribution multipliers by country and industry
・Agency Commission Percentage Table by Country/Industry
It is not easy to find information on the Internet that is easy to understand, such as the answer to the question, “What is the best way to get the best results?
However, I hope to explain a little more about this in the next issue.
But first, just one more point.
・International business models are finalized.
・For sales in the country concerned, the price (multiplied by a percentage) to wholesalers and retailers is known.
・The number of intermediaries between your company and end-users is known.
The final ‘price for international’ can be determined if the above state of affairs is.
However, the ‘international retail price’ cannot be specified by the manufacturer.
It is almost impossible for you to decide how much a distributor or retailer will sell for your products internationally.
I see.
Wouldn’t it be a bit of a stretch to say how much you can sell it for.
I would love to go there and be a sales agent, whether I can sell it cheap or expensive.
I’m going to sell it all over the place for ummmm, high prices!
I told you that pricing is a difficult thing.
For unrealistic prices, visit ・・・・・.
Yes, that’s right.
It’s not taken seriously, is it?
(I’d like to avoid that, too, if at all possible.)
・・・・.
P・P・Pricing,
I will learn a lot before the next time,
No need to worry!
（Is that true?)
I’m looking forward to it!
