Set an export price without confusing margin and markup

Define exactly what you are selling

Start with a product description that another person could use to identify the same goods. Record grade, materials, dimensions, pack size, tolerances, quantity, and any buyer-approved sample. Then choose the quantity and delivery point being priced. A price for one trial pallet should not be compared directly with a price for a full container or an annual supply commitment.

Build a cost sheet for that order rather than applying a standard percentage to the domestic selling price. Include purchase or manufacturing cost, export packaging, testing or inspection that you agreed to supply, local transport, documentation, banking charges, commissions, and the transport obligations you have accepted. Allocate shared order costs across the expected saleable quantity.

• State the unit: piece, kilogram, tonne, carton, or another defined quantity.
• Separate repeatable unit costs from one-time order charges.
• Record which costs change when the order size changes.

Choose a profit calculation deliberately

Markup is profit divided by cost. Margin is profit divided by selling price. They give different results. If the order cost is 100 and you add a 20 percent markup, the price is 120 and profit is 20. The margin is then about 16.67 percent. To earn a 20 percent margin on that same cost, the price must be 125.

Use the export-price tool to select one method explicitly and show the formula. A margin target must be below 100 percent. Calculate on the full set of costs you are responsible for, and show excluded destination charges separately. A healthy percentage on an incomplete cost base can still produce a loss.

Account for payment and currency

Price the transaction in a named currency and state the quotation’s validity period. If your costs are in rupees and the customer pays in another currency, use a dated conversion assumption and allow for the bank’s actual spread or charges. A public reference rate is a useful planning input; it is not a promise that your bank will transact at that rate.

Payment timing changes the commercial picture. Deposits, production lead times, credit periods, and inspection milestones can affect funding needs and the amount you are willing to quote. Write these assumptions into the quotation rather than leaving them in a separate conversation. The official export-negotiation guidance also treats price, delivery terms, and payment choices as connected decisions.

Test the quote before sending it

Create a base case and a stressed case using higher input or freight costs. Check whether the order still meets your target after discounts, commissions, and expected bank fees. Keep a record of the minimum acceptable price and who can approve an exception. Send the customer a clear offer with product, quantity, price, delivery terms, validity, and payment milestones.

After the order, compare actual profit with the original sheet. Differences in packaging, handling, exchange conversion, or order size are useful evidence for the next quote. Reuse the project as a template while checking every dated amount again.

• Export a proforma invoice only after reviewing the cost sheet.
• Do not silently replace a margin target with markup.
• Keep the assumptions and the customer-facing offer together.