Pricing, margin and currency riskLesson 53 of 136

Pricing, margin and currency risk

Once you know true landed cost per unit, set your selling price to cover it plus your target margin, plus a buffer for costs that vary shipment to shipment, such as demurrage on a delayed container. Calculate your break-even volume: how many units you must sell to cover the fixed costs of the shipment, such as forwarder minimum fees, before you start making a genuine profit.

If your purchase is priced in a foreign currency, a shift in the exchange rate between the day you agree the price and the day you actually pay can change your landed cost meaningfully. Either build a currency buffer into your pricing or explore forward contracts and other hedging tools through your bank once your import volumes justify the extra complexity.

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