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Export Cost

Export Cost. From EXW to FOB From FOB to DDP. by Günter Schranz. Export Costing - why. Knowing the costs is a crucial factor for finding the right price. Controlling Costs – Why?. Costs are picturing signals: Is our company still on the right course?

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Export Cost

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  1. Export Cost From EXW to FOB From FOB to DDP by Günter Schranz

  2. Export Costing - why Knowing the costs is a crucial factor for finding the right price

  3. Controlling Costs – Why? Costs are picturing signals: • Is our company still on the right course? • Are our products and processes in an optimal shape: cost, time, material …? • …. • Finally: Do we reach out goals? • Economizing costs strengthens competitiveness • Controlling costs is brings indicators for management decisions

  4. How to get the right cost Fixed Costs Variable Cost Export Costs*Cost at Market Fixed Costs Variable Cost Export Costs*Cost at Market Fixed Costs Variable Cost Export Costs*Cost at Market

  5. Some export costs • product modifications, • export literature, • translation, • export labeling • export packing • freight forwarding, • logistics, • compliance with foreign standards, insurance,

  6. Some export costs • credit checking, • export documentation, • export financing, • charges fees, • assurances & fees • overseas staff training … • communications • Promotion (trade fairs, travel … • …

  7. Budget – why when • If you can not determ exactly your cost or the expenses you have to face, try to set up a budget and move within it. • After you have your first experience, try to determinate where you budget has gone • Adapt it

  8. Process • Identify cost components  • Systematise Costs  • Calculate variable costs for each product • Calculate fixed costs for each product • Calculate total costs per unit 

  9. Assignment • Determine your EXW to FOB cost of your products per unit • Determine your FOB to DDP cost of your products per unit • Where do you see a chance to minimize costs • What key figure will help you to controll the costs

  10. Some comments: • While fix costs are hardly to economise, overhead costs may give you a chance. Start where people are directly involved, go ahead where you find contracts. • Cutting unavoidable expenditures in distribution could lead to idleness, to vulnerability for the product and it could end in loosing market shares. • Cutting cost in production could influence you product quality or change product characteristics and even lead inflexibility or loss of know how.

  11. Some comments: • If the team plays not well, the game is hardly to win. Loss of essential resources may affect all other sectors. Controlling provides Admin important alarm signals first. • Cutting essential market communication will influence sales directly. Be careful with the axe! You can save a patient’s life with a scalpel. • Short financing is expensive, cheap arrangements may have higher risks, hard payment conditions may bother your client. Adapt your financing to current needs.

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