{"id":14827,"date":"2025-03-06T13:58:01","date_gmt":"2025-03-06T10:58:01","guid":{"rendered":"https:\/\/uafm.com.ua\/?p=14827"},"modified":"2025-03-06T13:58:01","modified_gmt":"2025-03-06T10:58:01","slug":"yak-zminyuyetsya-tsina-vid-fabryky-do-kintsevogo-spozhyvacha-za-kordonom","status":"publish","type":"post","link":"https:\/\/uafm.com.ua\/en\/yak-zminyuyetsya-tsina-vid-fabryky-do-kintsevogo-spozhyvacha-za-kordonom\/","title":{"rendered":"How the price changes from the factory to the end consumer abroad"},"content":{"rendered":"<p><\/p>\n<h3>Factors Affecting Price Changes from the Factory to the End Consumer<\/h3>\n<p>When exporting furniture abroad, the final price for the consumer is significantly higher than the manufacturer&#8217;s price. This change is explained by various costs, regional pricing peculiarities, and the target market segment.<\/p>\n<p>&nbsp;<\/p>\n<h3>Main Costs Affecting Price Increase<\/h3>\n<ul data-spread=\"false\">\n<li><strong>Production Costs<\/strong> \u2013 raw materials, labor, energy costs, and factory overhead expenses.<\/li>\n<li><strong>Packaging and Handling<\/strong> \u2013 costs for safe packaging for international transport, pallets, protective materials, and labeling.<\/li>\n<li><strong>Logistics and Transportation<\/strong> \u2013 costs for domestic and international transportation, customs duties, import VAT, and local delivery.<\/li>\n<li><strong>Customs Fees and Taxes<\/strong> \u2013 vary by country and may include additional certification requirements.<\/li>\n<li><strong>Warehousing and Distribution<\/strong> \u2013 costs for storage, inventory management, and local distribution.<\/li>\n<li><strong>Retailer and Online Marketplace Margins<\/strong> \u2013 store or marketplace markup.<\/li>\n<li><strong>Marketing and Branding<\/strong> \u2013 costs for advertising, certification, showrooms, and product promotion.<\/li>\n<li><strong>After-Sales Service<\/strong> \u2013 warranty service, customer support, and product returns.<\/li>\n<\/ul>\n<h3><\/h3>\n<h3>Example of Final Furniture Price Formation in Poland (Factory to Retailer, Without Distributor)<\/h3>\n<h4>Pricing Stages | Costs (in units)<\/h4>\n<h5>1. Production Stage<\/h5>\n<ul data-spread=\"false\">\n<li><strong>Raw Materials and Components<\/strong> \u2013 30<\/li>\n<li><strong>Production and Wages<\/strong> \u2013 40<\/li>\n<li><strong>Quality Control and Testing<\/strong> \u2013 10<\/li>\n<li><strong>Packaging<\/strong> \u2013 15<\/li>\n<li><strong>Factory Price (EXW, Ukraine)<\/strong> \u2013 95<\/li>\n<\/ul>\n<h5>2. Logistics and Distribution<\/h5>\n<ul data-spread=\"false\">\n<li><strong>Delivery to Customs Warehouse and Customs Clearance in Ukraine<\/strong> \u2013 5<\/li>\n<li><strong>Transportation Ukraine-Poland<\/strong> \u2013 20<\/li>\n<li><strong>Customs Duties and Taxes (23% of Factory Price)<\/strong> \u2013 22<\/li>\n<li><strong>Warehousing<\/strong> \u2013 8<\/li>\n<li><strong>Total Distribution Costs<\/strong> \u2013 55<\/li>\n<\/ul>\n<h5>3. Retail Price<\/h5>\n<ul data-spread=\"false\">\n<li><strong>Marketing and Advertising Costs<\/strong> \u2013 15<\/li>\n<li><strong>Retailer Markup (50%)<\/strong> \u2013 75<\/li>\n<li><strong>Customer Service and Warranty<\/strong> \u2013 10<\/li>\n<li><strong>Retail Price (Excluding VAT)<\/strong> \u2013 250<\/li>\n<li><strong>VAT in Poland (23%)<\/strong> \u2013 57.5<\/li>\n<li><strong>Final Retail Price<\/strong> \u2013 307.5<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Contract Price Under Incoterms<\/h3>\n<p>When signing an international trade agreement, the manufacturer must specify the price according to Incoterms, which define the responsibility for transportation, customs procedures, and risks. This determines who bears the costs of customs clearance, delivery, and import duties. Below are contract price examples depending on Incoterms, based on the above calculation.<\/p>\n<h4>Contract Price by Incoterms | Incoterms | Description | Price (in units)<\/h4>\n<ul data-spread=\"false\">\n<li><strong>EXW<\/strong> \u2013 Factory in Ukraine, no delivery \u2013 <strong>95<\/strong><\/li>\n<li><strong>FCA<\/strong> \u2013 Warehouse in Ukraine, ready for shipment \u2013 <strong>100<\/strong><\/li>\n<li><strong>DAP<\/strong> \u2013 Delivered to Poland, without customs clearance \u2013 <strong>120<\/strong><\/li>\n<li><strong>DDP<\/strong> \u2013 Delivered, including duties and VAT \u2013 <strong>142<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Price Change Coefficient by Region<\/h3>\n<p>The ratio of the factory price to the retail price varies by market due to differences in logistics, taxation, and retail markups:<\/p>\n<h4>Region | Typical Price Increase Coefficient<\/h4>\n<ul data-spread=\"false\">\n<li><strong>Western Europe (Germany, France)<\/strong> \u2013 3-5x<\/li>\n<li><strong>Central and Eastern Europe (Poland, Czech Republic)<\/strong> \u2013 2.5-4x<\/li>\n<li><strong>North America (USA, Canada)<\/strong> \u2013 4-6x<\/li>\n<li><strong>Middle East (UAE, Saudi Arabia)<\/strong> \u2013 5-8x<\/li>\n<li><strong>Asia (China, Japan, South Korea)<\/strong> \u2013 3-5x<\/li>\n<li><strong>Australia<\/strong> \u2013 4-7x<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Price Coefficient by Market Segment<\/h3>\n<p>The final price also significantly depends on the furniture&#8217;s positioning within a specific market segment. Budget furniture has a lower markup coefficient, whereas premium products receive a higher markup due to branding, significantly higher marketing costs, potential additional delivery costs (e.g., refrigerated container), exclusivity, and high-quality materials.<\/p>\n<h4>Market Segment | Typical Price Increase Coefficient<\/h4>\n<ul data-spread=\"false\">\n<li><strong>Budget (Mass Market)<\/strong> \u2013 2-3x<\/li>\n<li><strong>Mid-Range<\/strong> \u2013 3-5x<\/li>\n<li><strong>High (Premium)<\/strong> \u2013 5-8x<\/li>\n<li><strong>Luxury<\/strong> \u2013 5-12x<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3>Important Disclaimer<\/h3>\n<p>The calculations provided are not pricing guidelines but rather an illustration of the price difference between Ukraine and foreign markets, considering the experience of furniture manufacturers we have communicated with and\/or assisted in transactions.<\/p>\n<p>&nbsp;<\/p>\n<h3>Conclusion<\/h3>\n<p>The final retail price of exported furniture is influenced by logistics, taxes, retail markups, and market strategy. Budget furniture has a lower markup coefficient, whereas premium products receive a higher markup (greater added value) due to branding and exclusivity. Businesses must carefully analyze target markets and pricing strategies to maintain competitiveness and profitability.<\/p>\n<p>\ud83d\udccc The example above illustrates how a factory price of 95 units can lead to a retail price of 307.5 units in Poland, considering all costs. This helps exporters understand key pricing factors and build an effective market entry strategy.<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/www.instagram.com\/oksana_donska?utm_source=ig_web_button_share_sheet&amp;igsh=ZDNlZDc0MzIxNw==\">Oksana Donska, <\/a><\/p>\n<p>Export Expert, Board Member of UAFM<\/p>\n\n\t\t<style>\n\t\t\t.huge-it-share-buttons {\n\t\t\t\tborder:0px solid #0FB5D6;\n\t\t\t\tborder-radius:5px;\n\t\t\t\tbackground:#3BD8FF;\n\t\t\t\t\t\t text-align:right; \t\t\t\t\t\t}\n\n\t\t\t#huge-it-share-buttons-top {margin-bottom:0px;}\n\t\t\t#huge-it-share-buttons-bottom {margin-top:0px;}\n\n\t\t\t.huge-it-share-buttons h3 {\n\t\t\t\tfont-size:25px ;\n\t\t\t\tfont-family:Arial,Helvetica Neue,Helvetica,sans-serif;\n\t\t\t\tcolor:#666666;\n\n\t\t\tdisplay:block;\t\t\t\tline-height:25px ;\n\n\t\t\t\t\t\t text-align:right; \t\t\t\t\t\t}\n\n\t\t\t.huge-it-share-buttons ul {\n\t\t\t\t\t\t float:right; \t\t\t\t\t\t}\n\n\t\t\t.huge-it-share-buttons ul li {\n\t\t\t\tmargin-left:3px;\n\t\t\t\tmargin-right:3px;\n\t\t\t\tpadding:0px;\n\t\t\t\tborder:0px ridge #E6354C;\n\t\t\t\tborder-radius:11px;\n\t\t\t\tbackground-color:#14CC9B;\n\t\t\t}\n\n\t\t\t.huge-it-share-buttons ul li #backforunical14827 {\n\t\t\t\tborder-bottom: 0;\n\t\t\t\tbackground-image:url('https:\/\/uafm.com.ua\/wp-content\/plugins\/wp-share-buttons\/Front_end\/..\/images\/buttons.30.png');\n\t\t\t\twidth:30px;\n\t\t\t\theight:30px;\n\t\t\t}\n\n\t\t\t.front-shares-count {\n\t\t\t\tposition: absolute;\n\t\t\t\ttext-align: center;\n\t\t\t\tdisplay: block;\n\t\t\t}\n\n\t\t\t.shares_size20 .front-shares-count {\n\t\t\t\tfont-size: 10px;\n\t\t\t\ttop: 10px;\n\t\t\t\twidth: 20px;\n\t\t\t}\n\n\t\t\t.shares_size30 .front-shares-count {\n\t\t\t\tfont-size: 11px;\n\t\t\t\ttop: 15px;\n\t\t\t\twidth: 30px;\n\t\t\t}\n\n\t\t\t.shares_size40 .front-shares-count {\n\t\t\t\tfont-size: 12px;\n\t\t\t\ttop: 21px;\n\t\t\t\twidth: 40px;\n\t\t\t}\n\t\t<\/style>\n\t\t\n\t\t<div 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