Export Cost Calculation: Is Your Quotation Undercutting You?

Export cost calculation isnt simple arithmetic—its the core of your pricing strategy. Simply put, there are several key points in the calculation:

• Procurement cost: Your purchase cost—the starting line.
• avoid: The cost of shipping the goods, including ocean freight,Air Transportation, and various miscellaneous fees.
• Export Drawback: The red envelope from the government to encourage more exports.

The classic approach? Purchase cost minus tax rebates, plus shipping fees, plus some profit, and voilà—your quotation is ready. But heres the catch: this isnt a one-size-fits-all solution, especially when market competition intensifies and the game changes.

The differences between industries are huge. If youre in a high-margin industry, you might not even care much about tax rebates—just add some profit to your price and call it a day. But in low-margin industries like packaging bags, every penny counts.

In these cutthroat industries, some companies use tax rebates as a secret weapon, either adding them to profits or offering discounts to customers to make their quotes more attractive. Simply put, its about who plays the game better.

Lets be realistic—the market is brutal, and you need to keep an eye on your competitors. What are suppliers from Vietnam or Sri Lanka quoting? You dont necessarily have to match their prices, but you should at least know their cards.

This is where tax rebates come into play. If the industry is fiercely competitive, consider using part of the rebate to lower your quote—effectively offering a discount without hurting core profits. If your product has unique advantages, like superior quality or exceptional service, you can confidently price higher.

The key is balance: costs must be covered, profits must exist, and your quote mustnt make customers roll their eyes. This requires crystal-clear calculations and some market reconnaissance.

Lets talk about your territory—packaging bags. The competition is intense, with Vietnam and Sri Lanka always offering lower quotes than you. When you quote based on procurement cost + transportation + profit, the client says, Too expensive!

Time for a new approach. Can you work something out with the tax refund? Suppose your tax refund is 5% (check the exact amount), and you pass on part of it to the client—your quote could then be closer to competitors. Or, scrutinize costs—are there ways to save on procurement or transportation?

Alternatively, highlight your strengths. Faster delivery, sturdier bags, or customized services can make clients feel your price is worth it. You don’t have to be the cheapest—just the most worthwhile choice.

Export cost calculation isn’t complicated, but it’s not something to do casually either. In a highly competitive market like packaging bags, you need strategies: leverage tax refunds, optimize costs, or showcase unique advantages. The goal? A quote that makes clients nod without you losing money.

Next time you calculate a quote, don’t just stare at the Excel sheet. Understand the market, study competitors, and grasp the client’s mindset—that’s the secret to turning a maze into a smooth path. What do you think?