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Unit 4 b

Unit 4 b. Pricing. Price Term in Contract. In contract: unit price, total amount, method of pricing Unit Price USD 100 per dozen FOB New York type of currency price per unit measurement unit trade terms HKD 30 per Carton FOB Dalian net. (net price, 净价 )

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Unit 4 b

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  1. Unit 4 b Pricing

  2. Price Term in Contract • In contract: unit price, total amount, method of pricing • Unit Price USD 100 per dozen FOB New York type of currency price per unit measurement unit trade terms • HKD 30 per Carton FOB Dalian net. (net price,净价) • USD 500 per M/T CIFC5 Boston. (price with commission,含佣价)

  3. Total Amount • Total price is the total amount of a deal. • e.g.: Total Amount: USD5000 • e.g.: Total Amount: USD5000 FOB Liverpool • Both commission and discount are general practices often employed in foreign trade to promote exporting and win keen trade competitions. Then,……

  4. Commission & Discount 1、Definition Commission Broker Discount Importer

  5. Commission is the service fees charged by the agents or brokers for the transactions made for their principles, such as the commission paid by the exporter to its sales agent, and the commission paid by the importer to its purchasing agent.

  6. Discountis the price deduction allowed by the Seller to the Buyer as a reward for paying cash (cash discount), buying in quantity (quantity discount, volume discount), making early payment (trade discount), or granting some other advantage to the seller. • The way to pay discount: • The discount is customarily to be deducted from the payment when the buyer pays for the goods.

  7. Pricing methods • (1)Fixed pricing：The seller delivers and the buyer accepts the commodities at a fixed price agreed by both parties, neither party shall have the right to change the agreed price. • (2)Flexible pricing: • (a) The pricing time and the pricing method are specified in the price terms. • e.g.: The price will be negotiated and decided by both parties 60 days before the shipment according to the international price level. • (b) Only the pricing time is fixed. • e.g.: to be priced on July 10, 2004 by both parties.

  8. (3)Partial fixed price and partial unfixed price: The parties concerned only fix the price for the commodities to be delivered recently, and leave the price of the commodities to be delivered in the long term open. • e.g.: for the goods to be delivered in several lots. • (4)Floating pricing: At the time of pricing, the price adjustment is also stipulated. Sometimes, the floating pricing consists of a basic price plus the adjustment. It can be expressed by a formula: Settled Price = Basic price + price adjustment. • e.g.: If the concluded price for other buyers is 5% higher or lower than the contract price, both parties will negotiate to adjust the contract price for the quantity of the contract.

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