Export Costs For Post Brexit Trade With Africa
Costs of exporting can of course make products far more expensive than when sold in domestic markets. Pricing must therefore be carefully monitored and controlled and take into account costs of freight, shipping insurance, overseas agent’s commissions, and other incidental expenditure.
Product insurance is essential and can be arranged through insurance brokers.As a rough illustration of what factors make for accurate pricing controls, the following must be taken into account:
Collecting long-standing payments and debts can prove a very serious problem, particularly for the small business.
One of the major attractions of dealing through domestic export houses or buying agents in one’s own country is the relative certainty of being paid promptly, and in sterling. Extended credit is not usually encountered.
Exporting direct on the other hand brings certain problems, mainly of ensuring payment and avoiding risks incurred from fluctuating currency exchange rates. It is no secret that some countries have a reputation for speedy payment, whilst others prove quite the opposite.
The normal procedure with a new customer to whom one exports, is to use either Letters of Credit or other documentary collection handled and co-ordinated by banks. If you plan to offer credit, you should take up references in the same manner as would be the case for a new UK customer.