International Pricing Models

Understanding FOB and CIF Pricing in Import/Export When engaging in international trade, accurately determining the cost of your goods is crucial—not just for profitability, but also for clear communication with partners, proper documentation, and strategic decision-making. Two of the most commonly used pricing terms in global shipping are FOB (Free on Board) and CIF (Cost, Insurance, and Freight). Understanding the components of each can help you price your products correctly and negotiate more effectively with suppliers or buyers. 🔹 What is FOB Pricing? FOB (Free on Board) refers to the cost of goods delivered to the port of shipment, including all expenses up to the point where the goods are loaded onto the vessel. The seller is responsible for the goods until they are on board. To calculate the FOB price, follow these steps: 1. Start with the Cost of Goods This is the basic price of manufacturing or purchasing your product. 2. Add Local Transport to Port This includes trucking or inland transport costs to move the goods from the factory or warehouse to the port. 3. Add Export Customs Clearance Costs Fees for preparing and processing the documentation required for export clearance. 4. Add Port Handling Charges Charges associated with handling the goods at the port (loading, terminal fees, etc.). ➡️ FOB Price = Cost of Goods + Local Transport + Export Customs + Port Charges ⸻ 🔹 What is CIF Pricing? CIF (Cost, Insurance, and Freight) goes beyond FOB. It includes the cost to transport the goods across the ocean and insures them during the journey. With CIF, the seller is responsible for getting the goods to the destination port, including arranging and paying for freight and insurance. To calculate the CIF price, take your FOB price and add: 5. Ocean Freight Charges The cost to ship the goods from the port of origin to the port of destination. 6. Insurance Costs This covers the insurance of the goods while they’re in transit by sea. ➡️ CIF Price = FOB Price + Freight + Insurance ⸻ 🔸 Example Calculation: Let’s break this down with some numbers: • Cost of Goods = $10,000 • Local Transport to Port = $500 • Export Customs Clearance = $200 • Port Handling Charges = $300 ➡️ FOB Price = $10,000 + $500 + $200 + $300 = $11,000 • Ocean Freight Charges = $2,000 • Insurance Costs = $100 ➡️ CIF Price = $11,000 + $2,000 + $100 = $13,100 ⸻ ✅ Why This Matters Mastering FOB and CIF calculations is more than just math—it gives you: • Better cost control • Stronger negotiation power with suppliers or buyers • Improved pricing strategy and profit margins • Clearer understanding of responsibilities and risks Whether you’re importing or exporting, understanding these terms and their components will make your international transactions smoother and more successful.

🚢 EXPORT PRICING SIMPLIFIED – Talk Logistics Like a Pro! 💼 Have you ever been confused by how export pricing is calculated? You're not alone—and the key lies in understanding the Incoterms. Whether you're a freight forwarder, shipper, or new to international trade, here’s a simple breakdown of 4 essential pricing models you must master: 📦 1. EXW (Ex Works) 💰 Factory price + packaging + seller’s margin. 🧭 The buyer handles everything from the factory gate onward—including local pickup, export clearance, and freight. ✅ Best for buyers with strong logistics networks in the supplier’s country. ⚠️ Risk: Buyers may face hidden costs if local handling isn’t well managed. 🚢 2. FOB (Free On Board) 🔄 EXW + inland transport + export clearance + loading at port. 🌊 Seller delivers the goods onboard the vessel at the departure port. ✅ Ideal balance—each party manages logistics in their own territory. 💡 Pro Tip: Always clarify port terms to avoid disputes! 🛡️ 3. CIF (Cost, Insurance, Freight) 🔒 FOB + sea freight + cargo insurance. 📍 Seller covers cost and risk up to the destination port. ✅ Safer for buyers unfamiliar with international freight. ⚠️ Watch out: Insurance is basic unless negotiated—verify coverage! 🚚 4. DDP (Delivered Duty Paid) 🏁 CIF + import duties + final delivery to buyer’s door. 🚛 The seller assumes full responsibility—from factory to doorstep. ✅ Perfect for buyers wanting a hands-off experience. ⚠️ Risk for sellers: Any delay in customs clearance or unexpected duties fall on you. 🧠 Whether you’re an exporter pricing a new deal or a buyer negotiating terms, understanding the impact of each Incoterm on cost, responsibility, and risk is essential for smooth trade operations. 💬 Which Incoterm do you deal with most often? Have you faced any challenges with DDP or CIF—such as delays, unexpected costs, or unclear responsibilities? Let’s make global trade simpler and smarter—together. 📥 Follow for more no-fluff insights on logistics, Incoterms, freight strategy, and B2B trade success. 👇 Comment below, share your experience, and tag someone who needs this cheat sheet! #SupplyChainSimplified #ExportTips #LogisticsExpert #GlobalTrade #Incoterms2025 #FOB #CIF #EXW #DDP #FreightForwarding #InternationalBusiness #ImportExport #LinkedInLogistics #TradeMadeEasy #BusinessGrowth #LinkedInTips #SupplyChainStrategy #B2BNetworking #GlobalLogistics #TransportMadeSimple

If you want to set maximum drug prices based on prices outside the United States, how would that work? What’s a Most Favored Nation (MFN) clause—and what does it mean for U.S. drug pricing? This week's Executive Order is raising lots of questions, so let's dive in. 𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝 International reference pricing is not new. Countries like Canada, France, and Germany already use it to set or negotiate maximum prices for brand-name drugs. The U.S. has historically resisted such models, but the cost gap has become harder to ignore. Revlimid, for example, sells for nearly $1,000 a pill in the U.S. and just a fraction abroad. [2,3] At the center of the order is a Most Favored Nation (MFN) clause, which would cap U.S. drug prices at the lowest price paid among a group of peer countries. Think of it as importing not the drugs themselves—but the prices. 𝐂𝐁𝐎 𝐑𝐞𝐩𝐨𝐫𝐭 A 2024 CBO report modeled this policy scenario, finding that tying U.S. drug prices to actual net prices in countries like Germany, Japan, and Canada could lead to a large reduction in U.S. brand-name drug prices—more than 5% on average, even after accounting for strategic responses by manufacturers. That’s the largest reduction among the seven pricing strategies CBO evaluated. [4] Broadly, three of the approaches would operate by capping the prices of prescription drugs or limiting price growth, while the four other approaches would operate by promoting price competition or by affecting the flow of information (e.g. transparent pricing, limiting DTC advertising). Of course, the details matter, and the trade-offs are real. 𝐆𝐥𝐨𝐛𝐚𝐥 𝐈𝐦𝐩𝐚𝐜𝐭 CBO noted that drugmakers could delay or limit launches in smaller countries to avoid triggering a low international reference price, or offer unobservable rebates and offsets to mask true prices abroad. In other words, pushing prices down in the U.S. could push them up—or push access down—in other countries. This approach has driven strong industry opposition. In 2020, PhRMA argued in litigation that MFN-style rules would hand foreign governments a say in what therapies are available to American patients—while reducing incentives for future innovation. That's not a great outcome, either. [5] So yes—this is a policy with real consequences, and that means real potential to reshape the broader kidney health landscape. *** What do you think? What else should we know or be thinking about here? -- Sources: [1] https://lnkd.in/e9CQGUmj [2] https://lnkd.in/eCyQaHtM [3] https://lnkd.in/e7QJs8gM [4] https://lnkd.in/ebaUDdkW [5] https://lnkd.in/e5pzu3GC Image Below: Manufacturers would be required to report to the HHS Secretary foreign net prices for all such products that they sell both domestically and in at least one of the foreign reference countries. Drug prices charged by manufacturers in the United States would be capped at a level reflecting the observed net prices in the reference countries (CBO Report).

🌍Navigating International Pricing: A Strategic Imperative for Beauty and Luxury Brands 💼💄Setting the right international price for your products is no simple feat - it’s a delicate balancing act that can make or break your global strategy. For beauty and luxury brands, this decision is influenced by a myriad of factors: from VAT disparities and logistical costs to local demand dynamics and competitive landscapes 📉💰Price too high, and you risk driving customers to seek alternatives—whether through cross-border shopping or the grey market. Price too low, and you leave valuable margin points on the table 🌐📊 Some industry leaders, like Chanel, opt for a unified global pricing strategy to eliminate purchase arbitrage. However, most brands adopt a more localized approach, tailoring prices to reflect the unique economic and competitive conditions of each market 📈🔍The key to success? Vigilant monitoring of competitors and foreign exchange rates. These insights are critical for ensuring your pricing strategy remains optimal 💬✨How does your brand approach international pricing? Let's discuss! #Beauty #Pricing #Perfume #Cartier #Luxury #Fragrance #Richemont #PricingStrategy #BusinessInsights