Pricing a Product in Other Countries

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Pricing a Product in Other Countries

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EvaBach

posts: 11

Jun 02, 2009 8:52 AM ET Quote Report Abuse

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Hi,

I am not sure if this is posted in the correct category...

I have a product that will have a fixed retail price of $9.95 in the US. We also want to carry this product in Mexico and Canada. How do you deal with the exchange rate fluctuation when you are working with a fixed price? I am assuming that the country carrying the product prices it and then if the rate goes up or down, their price just stays the same? Any assistance with this would be greatly appreciated.

Thank you very much!
Eva

lizzers

posts: 29

Jun 16, 2009 10:42 PM ET Quote Report Abuse

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Hi Eva,

I can help you with this as I`m living in Mexico City and working in intl business. If it is the retailer in the foreign country that is importing your product directly, then they will set the price based on what their landed cost is (based on the cost of the product + import and freight costs) and what the market will bear. You as the manufacturer can always set a MSRP (manufacturer`s suggested retail price) for foreign countries.

As far as the exchange rate goes, they will have to raise prices if the exchange rate moves against them. I assume they will all be purchasing in USD, and if that is the case it will be more expensive for them to purchase, to import, to market, etc and they will have to increase the price (unless they are using some sort of cost averaging).

I`d be happy to give you more tips, so feel free to send me a message.

Thanks!

Elizabeth

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