This article provides considerations on how to effectively price your ecommerce products/services for international buyers
Last Published: 10/28/2016

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Have you accounted for the full landed costs of the overseas transaction?

When pricing your goods/services for foreign buyers, you must consider all the costs associated with cross-border ecommerce and ensure it is reflected in the price.  Some common costs are:

  • product registration in local market (ie: cosmetics, vitamins, electronics)
  • duties and taxes
  • shipping
  • any local fees (ie: local taxes in addition to country duties & taxes)

Who are your competitors and what are they doing in the target market?  

Knowing some key factors about your competitors can help you appropriately price your services.  For example, are your competitors in the overseas target market local or from other countries as well?  Is there much competition, if so how strong is it?  Are there any consumer forecasts for the overseas market that would indicate future growth opportunities?  Answering these questions will allow you to more effectively determine your pricing structure.  ITA’s Country Commercial Guides (CCGs) can assist here as well.  
 

Are your consumers in the target market price-sensitive?

Price sensitivity not only effects how you price your product, but can affect how you market it as well.  Some overseas markets are comprised of consumers that are not willing to pay full price exerting downward pressure on the prices and calling for a tailored marketing strategy to address this.  Other markets are comprised of consumers that will follow the price fluctuations that greater market forces may exert, possibly allowing for a bit of flexibility on pricing.
 

Would you be able to position your product as “premium” to justify a higher price?

If you must set your product at a certain higher price in order to preserve sales margins, what quality attributes can you identify to market your product(s) as “premium” in the overseas market?  “Made in the USA” is an obvious premium indicator for many overseas markets.  Do you have superior materials or manufacturing process that adds to the overall product quality that your competitors in an overseas market lack?  If so, be sure to utilize these factors to your advantage. 
 

USG provided resources:

We always recommend contacting a local International Trade Specialist or Global eCommerce Specialist within the U.S. Commercial Service’s worldwide network to receive free counseling.  Through our International Expansion Blueprint service, our trade professionals can help map out a global ecommerce strategy and to determine which markets might be best for your product or service.  Also, you can do some preliminary homework by taking advantage of the Country Commercial Guides (CCGs).  Produced by U.S. embassies and consulates abroad, the CCGs provide the latest “boots-on-the-ground” market intelligence on more than 140 countries.

 

Industry provided resources:

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For Further Consideration:

•    Protect Your Online Brand
•    Choosing an eCommerce Channel Mix
•    Identify eCommerce Market Opportunities
•    Build Your Digital Brand
•    Optimize Your User Experience (UX)
•    Getting Paid from Cross-Border eCommerce
•    Ship Your eCommerce Products
•    Manage After-Sales Service

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This article brought to you by the eCommerce Export Resource Center

 




eCommerce Industry Advertising Cost and Pricing eCommerce Foreign Trade Techniques Sales Promotion Taxes