Take care that you include every item of cost from the warehouse to the client’s doorstep, including your profit margin and keeping this as realistic as possible to remain competitive. It is important to know the freight implications on landed costs so that you discuss this with the client offering different options based on the mode of transport before settling on one that is mutually beneficial. Keep in mind that landed cost includes other expenses like insurance, customs taxes and tariffs, currency conversions, packaging, port handling charges, and documentation fees. Generally, freight costs vary depending on the mode of transport with airlifts costing more for heavier cargo but cheaper and faster for lighter parcels. Get as many freight quotations as you can from various service companies, including possible future discounts on volumes to help you arrive at a competitive landed cost (sale price).
Since landed cost plays a crucial role in the pricing of export sales, you must choose the mode of transport carefully with emphasis on affordable rates to reap maximum benefits. Freight and delivery costs, if any, added to the initial price of product ex-factory form the final landed cost and hence invoice price. If most of your sales are overseas, shipping costs become a big factor in your final price. Understanding costs and managing these prudently will determine the profitability of your business and boost your sales. Trade thrives on competitive pricing of products that earn the seller attractive margins and the buyer a good bargain.
Here are factors to consider as you calculate freight cost per unit for your shipments. It is important to understand that your freight costs depend on various factors that include the medium of transport, size and weight, distance, and type of cargo. Still, they are best for small to medium size cargo and weights from as low as 10kgs to one ton delivered in the shortest time possible besides generous discounts for regular shippers. Courier services might appear expensive compared to shipping by sea. If you are involved in e-Commerce and seeking ways of upscaling your online business through competitive prices, you need to get the lowest possible shipping rates. Currently, a new shipment concept, the courier services, has gained popularity for the movement of lighter goods needed across vast distances in the shortest time possible.Ĭourier companies like UPS, FedEx, and USPS are at the forefront of logistics trends in 2020 going forward while offering great flexibility to clients, especially in shipping rates and convenience of cargo sizes. International trade has evolved over time from maritime and rail to include airfreight today, all with different cost implications and advantages to both shipper and buyer.
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