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You are here: Step 9: Obtaining finances/resources for your exports > Pricing as a means of financing  
Pricing as a means of financing

Pricing as a financing mechanism

Clearly, the export price that you agree to with the foreign buyer impacts on the income you generate and your ability to pay for your export endeavours. If you price too low, there may be little or no profits with which to finance your exports. Price too high, then you can pay back any export-related costs more quickly, but you stand to loose the order because your price is too high. Your pricing strategy is therefore an important input to your financing requirements. Bear in mind that your export price is decided on based on the costs your incur to produce the products in question, and the profit margin you how to achieve, which, in turn, is influenced by the pricing strategy you decide to follow. Click here to learn more about costing and pricing strategies.

Absorbing the credit costs into your export price

In the instance where you decide to offer relatively short-term credit (say between 30-60 days) to the foreign buyer, and your firm has the capacity to do so, it may be worthwhile to absorb the credit costs into your export price. You would include these credit costs as part of your costing exercise.

To learn more about pricing strategies you can follow and the impact that they have on your financing requirements, click here.

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Step 9: more information

Step 9: Obtaining finances/resources for your exports
      .Bank financing
      .Payment methods as a means of financing
      .Payment terms and export financing
      .Export receivables
      .Foreign currency loans
      .Alternative sources of financing

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More information on Step 9
Learning to export... The export process in 21 easy steps
Step 1: Considering exporting
Step 2:Current business viability
Step 3:Export readiness
Step 4:Broad mission statement and initial budget
Step 5:Confirming management's commitment to exports
Step 6: Undertaking an initial SWOT analysis of the firm
Step 7:Selecting and researching potential countries abroad
Step 8: Preparing and implementing your export plan
Step 9: Obtaining financing for your exports
Step 10: Managing your export risk
Step 11: Promoting the firm and its products abroad
Step 12: Negotiating and quoting in exports
Step 13: Revising your export costings and price
Step 14: Obtaining the export order
Step 15: Producing the goods
Step 16: Handling the export logistics
Step 17: Export documentation
Step 18: Providing follow-up support
Step 19: Getting paid
Step 20: Reviewing and improving the export process
Step 21: Export Management
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