How to Calculate an Export Price: From EXW to FOB, FCA and CIF
Build the price in layers. Start with your ex-works (EXW) cost and margin, then add each cost you take on as the seller under the Incoterm you quote: export packing, loading, inland transport to the port or terminal and export clearance for FCA or FOB; then main freight for CFR or CPT; then insurance for CIF or CIP. Always state the Incoterm, the named place, the currency, the unit and how long the price is valid.
Many exporters lose money — or lose the buyer — on the price line. Either a cost is forgotten, or the buyer cannot compare the offer because it is unclear what the price includes.
Incoterms are the international rules, published by the International Chamber of Commerce (ICC), that define which costs and risks the seller and the buyer each carry. This guide shows how to turn them into a price you can defend. Use it as a method; your own figures come from your suppliers, forwarder and insurer.
Step 1: Know your ex-works cost
Everything starts at your door. Add up, per unit you sell (kilo, carton, ton or container):
- Product or raw-material cost.
- Processing, grading and packing labour.
- Packaging materials and labels for the target market.
- Certification, testing and inspection costs spread over the volume.
- Overheads and finance costs, such as the time between shipping and getting paid.
Then add your margin. This gives your EXW price: the buyer collects the goods at your premises and handles everything after that.
Step 2: Choose the Incoterm you will quote
Incoterms 2020 has 11 rules. The ones exporters quote most often:
- EXW: the buyer takes the goods at your premises.
- FCA (named place): you deliver to the buyer's carrier, for example at a container terminal, cleared for export.
- FOB (named port of shipment): you deliver the goods on board the vessel, cleared for export.
- CFR / CPT: you also pay the main freight to the named destination.
- CIF / CIP: you also arrange insurance.
The ICC notes that FOB, CFR and CIF are meant for goods loaded on board a ship. For containers handed over at a terminal, FCA, CPT or CIP usually fit better, because risk passes when you hand the container to the carrier.
Step 3: Add the costs to the port or terminal
For FCA or FOB, add on top of EXW:
- Export packing and palletising, if not already in the product cost.
- Loading at your premises.
- Inland transport to the terminal or port.
- Export customs clearance and documents: certificate of origin, phytosanitary certificate where needed, and your customs broker's fee.
- Terminal and port handling charges that fall on the seller.
Ask your freight forwarder for a written quotation, so these are real figures and not estimates.
Step 4: Add freight and insurance for CFR, CIF, CPT or CIP
- Freight: a quotation from your forwarder or the shipping line to the named destination port or place, for the right container type (for example a reefer for fresh produce).
- Insurance for CIF: Incoterms 2020 requires the seller to buy at least minimum cover, Institute Cargo Clauses (C), for at least 110% of the contract price.
- Insurance for CIP: Incoterms 2020 requires higher cover, Institute Cargo Clauses (A).
- Freight rates change often, so give a short validity for CIF and CFR prices, or quote FOB/FCA and let the buyer arrange freight.
Step 5: Write the price so a buyer can compare it
A complete price line has:
- The amount and currency, for example EUR or USD.
- The unit: per kilo, per carton or per container.
- The Incoterm, the edition and the named place, for example "FCA Alexandria container terminal, Incoterms 2020".
- What is included: variety or grade, size, packing, certificates.
- Minimum order and validity date.
A buyer who receives this can compare your offer with others in minutes — and that makes them more likely to answer.
Step 6: Check the result against the market
Before you send the offer, compare it with what the market pays. Trade data from UN Comtrade or ITC Trade Map gives an average import unit value for your HS code in each country; it is a rough benchmark, not a price list. If you are far above it, look at what you can change — packing, size, volume or Incoterm — rather than cutting your margin blindly.
Sources
Common questions
Which Incoterm should I quote first?
Many exporters start with FOB or FCA at their port or terminal: you control the costs you know, and the buyer can add freight from their own forwarder. If the buyer asks for a delivered price, add freight and insurance on CFR/CIF or CPT/CIP and keep the validity short.
Is FOB wrong for container shipments?
It is widely used, but the ICC says FOB is meant for goods loaded on board a vessel. With containers you usually hand the goods over at a terminal before loading, so FCA matches what really happens and when risk passes.
Do I need to mention the Incoterms edition?
Yes. Write "Incoterms 2020" after the rule and the named place, so both sides use the same rules.
Can you help us price for a new market?
Yes. As part of export market research we compare your costs with the market's import values by HS code, and help you choose the markets and the price basis that leave a healthy margin.
Not sure your export price is right?
Book a free 30-minute consultation. Bring one product and one target market, and we'll look at the price build-up together.
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