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CHAP19

VIEWS: 13 PAGES: 12

									          CHAPTER XIX
   PRICING IMPORTED GOODS &
    DISTRIBUTION CHANNELS
 Cost of Imported Merchandise
 Value Marketing
 Distribution Channel
 Selection of Sales Representative
 Sources of Information




                                      1
  Cost of Imported Goods
(1) FOB price
(2) Ocean or air freight
(3) Marine insurance premium
(4) Bank charge
(5) Unloading charge
(6) Customs duty
(7) Merchandise processing fee (.25%) (Minimum
    $25 & Maximum $485)
(8) Harbor maintenance fee (.125%)
(9) Customs broker's fee
(10) Customs bond fee 1
    Landed cost at importer's harbor


                                                 2
 Cost of Imported Goods
(11) Trucking from harbor to warehouse
(12) Storage at warehouse
(13) Product liability insurance2
     Net cost to importer
1 Single transaction bond premium: $3.00 per

  thousand dollars of value plus duty (general
  merchandise)
2 Applicable to imports with no domestic

  representation by a foreign manufacturer




                                                 3
    Cost of Imported Goods
   Product Liability Insurance Premiums
     Fruit                  $4.522 per $1,000 receipts
     Computer
      components             $6.016
     Tools                  $7.140
     Clothing               $4.011
     Shoes                  $1.924
     Plastic piping         $10.325
     China (Tableware)      $6.260
     Pens/Pencils           $2.992
     Giftware               $4.962

     Premiums are normally higher for start-up operations




                                                             4
        Cost of Imported Goods
   Retail price: Minimum four times FOB
    price
   General markup
    (1) Mail order items: 300 percent
    (2) Wholesaler: 30 to 50%
    (3) Retailer: 100%
    (4) Importer: Minimum 30 to 50% when
    stock carried, 10 to 20% when no stock
   Do not import anything without a firm
    order. Better get a letter of credit from a
    buyer.

                                                  5
Cost of Imported Goods

   Until you have built up strong distribution
    channels, stick to sample sales without
    carrying stock.
   Stipulate key specifications in your
    purchase order and letter of credit
   The 3rd party inspection such as SGS
    International is recommended if you
    import from unfamiliar suppliers



                                                  6
         Value Marketing
(1) Offer products that perform
(2) Give more than the consumer expects
(3) Give guarantees: a no-question-asked
    guarantee or a longer guarantee
(4) Avoid unrealistic pricing
(5) Give the consumer the facts: Detailed
    information
(6) Build relationship (Relationship
    Marketing)-Frequent-buyer plan, 800
   numbers, and membership clubs

                                            7
            Distribution Channel
   The success of a product: 30% product 70%
    marketing
   One region or one market segment and be
    successful. Very difficult to "serve it all" and be
    successful.

   Consumer products:
     Importer--> Sales Rep--> Wholesaler-->
      Retailer--> Public
     Importer--> Wholesaler--> Retailer--> Public
     Importer--> Sales Rep--> Retailer--> Public
     Importer--> Retailer--> Public
     Importer--> Public
                                                          8
          Distribution Channel

   Industrial products:
        Importer--> Sales Rep-->Distributor-->
         End User
        Importer--> Distributor--> End User
        Importer--> End User

     •   Sales Representative = Manufacturer's
         Representative




                                                  9
     Selection of a Sales
       Representative
(1) Through referrals. Most successful
    manufacturer's representatives do
    not advertise.
a. Referrals from other sales agencies:
    Agencies selling other products to
    the same market
b. Referrals from other importers:
    Importers of similar but
    noncompetitive products
c. Referrals from potential buyers of
    your products
                                          10
Selection of a Sales Representative
(2) Advertising
  a. In the industry publication: Every industry
     has its own magazine.
  b. In MANA's Agency Sales magazine or
     Directory of Manufacturer's Sales Agencies
      •   Manufacturers' Agents National Association
          (MANA): http://www.manaonline.org
  c. Trade show: A sign "Reps Wanted in
     ________"

     Thorough investigation of the
      representative's credentials before signing
      any agreements


                                                       11
        Sources of Information
   PIERS (Port Import Export Reporting Service)
      www.piers.com




                                                   12

								
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