国际贸易实务第三章 ppt

2013-7-25
Zhou Riqi
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Conversion of FOB, CFR & CIF Prices
CFR = FOB + Ocean Freight
Ocean freight
Provided by shipping lines Quoted as packaged price Others like “additionals” and “surcharges”
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Zhou Riqi
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3.2 Pricing considerations
Anticipated profit margin
a new market long-term market growth; an outlet for surplus production or outmoded products a secondary market and lower expectations regarding market share and sales volume
Payment terms
The lower the financing charges, the higher the risk of payment
Other factors to be considered
foreign exchange rates international market price for similar products policies and regulations in a particular market area
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3.1 Expression of export price
Four components in a standard format of a price:
A code of currency: USD, CAD,CNY, EUR, GBP A number indicating the price unit A unit for measuring quantity: kg, gr, m/t, yd, set A certain trade term: FOB, CFR, CIF
FOB in freight currency
FOB in freight currency = (Total Cost + Profit)/Exchange Rate
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3.3.2 CFR Price
If FOB price is available
Examples:
USD225.30/piece CIF New York FOB Guangzhou EUR12.80/set
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3.2 Pricing considerations
Cost
Cost of production
Direct cost: material costs, labour costs, allocation of fixed costs, packing costs, etc. Administrative costs: overhead
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3.3 Calculation of price
Table 3.1 Costing Worksheet
Item Manufacturing cost + Export packaging (depending on mode of transport) + Profit margin – Discounts/rebates/volume discounts/sales commission = Selling price ex works (EXW) + Transport costs from plant to place of loading (train/truck) = Selling price free carrier (FCA) + Transport costs from place of loading to shipping port + Unloading at harbour + Transport insurance to shipping port = Selling price free alongside ship (FAS) + Storage costs, terminal handling charge (THC), loading onto ship + Costs for export clearance + Commission of port agent Sub-Total Total
Chapter Three Export Price
LEARN ING OUTCOMES
★ State the standard form of a price quoted in international trade . ★ Identify the major factors in pricing decision ★ Calculate basic prices ★Understand the function and calculation of commission and discount ★ Explain the ratios used to interpret profitability ★ Define the four stages of price communication
Suppose the fixed cost of a plant is USD25000, if the unit selling price and variable cost of its product is USD5 and USD2.5 respectively, then the break -even point will be: 25 000/( 5 -2.5) = 10 000 Units This approach is particularly useful where the company has excess production capacity and needs to reduce its export prices to be competitive
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3.3.3 CIF Price
If FOB price is available
CIF = FOB + Ocean Freight + Insurance Premium
If CFR price is available
CIF = CFR + Insurance Premium
Calculation of Insurance Premium (I)
Based on contract value/invoice value + A markup (normally 10%) to cover incidental costs Formula: I = CIF x (1+10%) x Premium Rate (R) Therefore CIF = CFR + CIF x (1+10%) x Premium Rate (R) or CIF = CFR / (1 – 110% x R)
Capability of target market
Referring to the consumption power, income level, supply and demand relationship The higher the capital income of the target market, the higher the price
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3.3 Calculation of price
★ Cost-plus Pricing ★ Marginal Cost Pricing
Break -even point =Total fixed cost/(Unit price-Unite variable cost)
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★ Buyer Based Approach It needs a good understanding of the marketplace ★ Competition Based Approach If competition is fierce, the exporter has to provide prices benchmarked to competitors or market average so as to stay in business. In this case profit margins could be lowered
Cost of sales
Marketing costs: advertising, sales trip expenses, commissions intermediary services
Cost of delivery
Warehousing and transporting charge, insurance premium, taxes and tariffs, customs duties
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Zhou Riqi
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3.3 Calculation of price
= Selling price free on board (FOB) + Freight to port of destination = Selling price cost and freight (CFR) + Insurance = Selling price cost, insurance, freight (CIF) + Additional costs for full transport insurance = Price ex ship (DES) + Costs of import clearance + Unloading, THC + Costs for documents (ie delivery order) = Selling price delivered ex-quay (DEQ) + Land transport costs to nominated destination + Full transport to destination = Selling price delivered duty unpaid (DDU) + Costs of customs duty = Price delivered duty paid (DDP)
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3.3.1 FOB Pri源自文库e
FOB in local currency
Table 3.2 FOB Costing Worksheet
FOB + + + + + = Free on Board Factory purchasing cost Profit margin Transport cost from plant to shipping port Transport insurance to shipping port (optional) Storage costs, terminal handling charge (THC), loading onto ship charge Export customs clearance cost FOB (Named port of shipment) Sub-Total