Archive for March, 2021

Factors to Consider When You Are Exporting Goods and Services

March 4th, 2021

If you are a business entity and want to export goods and documents across the international borders, it is better to know several things before making transaction. In a particular export channel, there are several points. At first, you should check the business partners and end-users against the sanctioned and denied party lists. Then, if the goods or technology that you are planning to export fall under the jurisdiction of EAR and ITAR, in other words items are listed on Commerce Control List (CCL) or U.S. Munitions List (USML), exporting process will require further review. You have to research and classify the exported items in one of CCL or USML categories. Determining the need for export license is also very critical and important. In the earlier times, most of the exporters manually conducted the process of screening the products and the business partners.

Due to increasing number and complexity of products, exporters and end-users, checking through manual means is no longer easy. It requires lots of time and expertise knowledge, the customers also want the access the products quickly. Keeping in mind these factors, the exporters are taking help of the online software applications. The online tools are performing bulk and individual screening as per requirements.

Business Partner and End-User Screening:

It is one of the important parts in the export. The exporters check the business parties, end-users and the freight forwarders against the sanctioned and denied party lists. The parties that fall under the sanctioned party lists have the right to export their products outside the US premises. The export parties that come under the restricted party lists, they require the license before exporting. Violating the trade rules is a crime. The business entities that violate the rules and regulations have to pay administrative fines and other financial penalties to the government. In these days, the export companies are using the software applications to screen the parties. The online tools are effective in bulk and individual screening too.

EAR, ITAR and OFAC Compliance:

When you are selling the dual-use and defense items across the international borders, you have to be very careful in determination of the true end-use application and destination country and the end-user. Many times exportation of dual-use goods and related technology (i.e. EAR controlled items) to restricted countries and for restricted end-uses would require an export license or an authorization from the U.S. Department of Commerce – Bureau of Industry and Security (BIS). Export or foreign sale of ITAR controlled goods and technology would be even more restricted. The export of the defense articles out of the U.S. and provision of a defense service to a foreign national requires through checking against all the regulations and generally an export license or authorization is needed from the U.S. Department of State – Directorate of Defense Trade Controls (DDTC). Full compliance with the U.S. regulations and determining the need for a license are some of the important steps before you are exporting the dual-use and defense articles and also providing defense services to the non-U.S persons and business entities. U.S. persons and U.S. based businesses and their subsidiaries should also be very careful about doing business with the nationals of and entities located in the U.S. embargoed entities. Many times, such activities are regulated by the BIS or OFAC. There are some of the companies that offer software applications for the business entities. Some of the ITAR related services include DDTC registration assistance, license exemption analysis and guidance, technology control plan and preparations and many more.

Thus, in the recent days, most of the business entities are using the software applications to screen the products and determining the trade license as well. Classification of products and compliance with the rules are so very important

How Much Do You Charge For Your Goods and Services?

March 4th, 2021

It’s one of the most basic, yet most elusive questions asked in all types of businesses. Of course you want to make money, but you also want to set prices at a reasonable rate so that you will not lose business. So how do you strike that balance? How do you calculate pricing for products and services offered through your business? How do you determine a rate that is right for all involved?

Business First

The first thing to remember when setting prices for goods and services is that you are in business to turn a profit – not just to be a nice guy or girl, but to make money. If you do not set your prices at a rate that allows for profitability after expenses, you do not have a profitable, sustainable, business, and success in small business will always be unachievable. If you’ve set the bar too low, you’ll be out of business within months.

Clients and Customers Second

Naturally you cannot completely ignore your clientele and customer base when setting your prices. Whomever your target audience is, your prices must reflect a cost that can be supported by that market segment. However, if you do your research and give value for the money, you should have arrived at a cost sustainable by your group.

Tips for Setting the Pricing Bar

Let’s take a look at the actual process of setting prices for products and services. Use these tips and market factors to help you arrive at a competitive pricing structure.

- First, research the competition. Get a clear view on the prices they are charging, and where your offerings can fit in along the spectrum. Use averages as a basis, and adjust up and down according to additional or lesser value (based on factors such as those following).

- Decide how to charge. Are you looking for an hourly rate or a project-based rate? Is it a unit or wholesale price you are offering? Evaluate your product, experience or skills. In service-based industries, generally speaking, an increase in experience equates to a higher fee for service.

- Account for all variables. If there is something your product offers that another doesn’t, increase to reflect the value. If there are additional costs involved for shipping, marketing and so on, add those in too. For service-based businesses, consider all the small variables that might impact pricing. If you offer additional services, compensate for them. If clients expect add-ons, build a fee structure that allows you to recoup revenue.

- Allow for overheads. Determine how much of your business’ overheads must be supported by individual sales. Build that fractional amount into your pricing.

- Build in profit. After carefully evaluating the competition and all expenses, set a base price and then build a profit-margin into it. Determine how much profit you will be satisfied with and set your price accordingly.

Justification through Value

The one factor to always keep at the forefront of pricing is value. To be clear here, this is not about justifying your price. Your price will be justified if you have set prices fairly, based on the true value of your goods or services. Focus on the value you deliver, set a reasonable, sustainable fee, and be confident that you have served the greater good of all involved.