1. CHAPTER XIX PRICING IMPORTED GOODS & DISTRIBUTION CHANNELS
Cost of Imported Merchandise
Value Marketing
Distribution Channel
Selection of Sales Representative
Sources of Information

2. Cost of Imported Goods (1) FOB price (2) Ocean or air freight
(3) Marine insurance premium
(4) Bank charge
(5) Unloading charge
(6) Customs duty
(7) Merchandise processing fee (.25%) (Minimum $25 & Maximum $485)
(8) Harbor maintenance fee (.125%)
(9) Customs broker's fee
(10) Customs bond fee 1
Landed cost at importer's harbor

3. Cost of Imported Goods (11) Trucking from harbor to warehouse
(12) Storage at warehouse
(13) Product liability insurance2
Net cost to importer
1 Single transaction bond premium: $3.00 per thousand dollars of value plus duty (general merchandise)
2 Applicable to imports with no domestic representation by a foreign manufacturer

4. Cost of Imported Goods Product Liability Insurance Premiums
Fruit $4.522 per $1,000 receipts
Computer
components $6.016
Tools $7.140
Clothing $4.011
Shoes $1.924
Plastic piping $10.325
China (Tableware) $6.260
Pens/Pencils $2.992
Giftware $4.962
Premiums are normally higher for start-up operations

5. Cost of Imported Goods Retail price: Minimum four times FOB price
General markup
(1) Mail order items: 300 percent
(2) Wholesaler: 30 to 50%
(3) Retailer: 100%
(4) Importer: Minimum 30 to 50% when stock carried, 10 to 20% when no stock
Do not import anything without a firm order. Better get a letter of credit from a buyer.

6. Cost of Imported Goods
Until you have built up strong distribution channels, stick to sample sales without carrying stock.
Stipulate key specifications in your purchase order and letter of credit
The 3rd party inspection such as SGS International is recommended if you import from unfamiliar suppliers

7. Value Marketing (2) Give more than the consumer expects
(1) Offer products that perform
(2) Give more than the consumer expects
(3) Give guarantees: a no-question-asked guarantee or a longer guarantee
(4) Avoid unrealistic pricing
(5) Give the consumer the facts: Detailed information
(6) Build relationship (Relationship Marketing)-Frequent-buyer plan, 800 numbers, and membership clubs

8. Distribution Channel Consumer products:
The success of a product: 30% product & 70% marketing
One region or one market segment and be successful. Very difficult to "serve it all" and be successful.
Consumer products:
Importer--> Sales Rep--> Wholesaler-->
Retailer--> Public
Importer--> Wholesaler--> Retailer--> Public
Importer--> Sales Rep--> Retailer--> Public
Importer--> Retailer--> Public
Importer--> Public

9. Distribution Channel Industrial products:
Importer--> Sales Rep-->Distributor-->
End User
Importer--> Distributor--> End User
Importer--> End User
Sales Representative = Manufacturer's Representative

10. Selection of a Sales Representative
Through referrals. Most successful manufacturer's representatives do not advertise.
Referrals from other sales agencies: Agencies selling other products to the same market
Referrals from other importers: Importers of similar but noncompetitive products
Referrals from potential buyers of your products

11. Selection of a Sales Representative
(2) Advertising
In the industry publication: Every industry has its own magazine.
In MANA's Agency Sales magazine or Directory of Manufacturer's Sales Agencies
Manufacturers' Agents National Association (MANA,
Trade show: A sign "Reps Wanted in ________"
Thorough investigation of the representative's credentials before signing any contract

12. Sources of Information
PIERS (Port Import Export Reporting Service)