Kenya - Pricing Kenya - Pricing
Pricing formulas will vary from one product to another based on supply, demand, landed cost, margin expectations, and competitive alternatives. Typically, gross margin expectations range between 15-30%, though others believe this to be true of expected net margin. Landed product costs are arrived at by applying cost formula and the sum total of: Free on Board (FOB) costs, as per bill of lading; net sea/airfreight charges; insurance; shipping agents fee; port charges; and clearing and forwarding charges - generally up to 0.5% of FOB and land transport costs. Kenyan importer preference for price quotations is Cost-Insurance-Freight (CIF) in U.S. dollar to Mombasa or Nairobi rather than FOB at a U.S. port.
Whether quotes are made FOB United States or CIF Kenya, the exchange of title may take place in either location. For example, a U.S. exporter may quote CIF Kenya (including the cost of sea freight and insurance in the invoice), but pass title at the U.S. port in exchange for payment at that time. This offers several benefits to the U.S. seller: the transaction takes place in the U.S. and under U.S. law; the U.S. company won’t find itself owner of merchandise stranded at the Kenyan port of entry; and the importer of record is the Kenyan counterpart, who is always better positioned to manage local customs formalities.