Discusses pricing formula and other fees, value-added tax (VAT), etc.
The importance of pricing in Poland cannot be overstated. Pricing is the key to successfully selling U.S. products and services in Poland. Working capital is limited in Poland, even among the larger, more successful Polish companies. Polish businesses generally spend money wisely, after thoughtful and sometimes lengthy consideration. The most commonly expressed reason for failed sales efforts per potential Polish clients continues to be that “the price is too high.” The risks surrounding exchange rate fluctuations can make pricing difficult. Typically, U.S. manufactured goods are compared to similar European-made goods and the lowest cost item wins the day.
Establishing the price of U.S. made products is further complicated by the addition of customs duties, Value Added Tax (VAT), and, in some cases, excise taxes, which may dramatically elevate the final retail price of a product. Flexibility in pricing is important and initial market penetration to gain product awareness among Polish consumers should be the goal. Successful U.S. exporters work together with their Polish representatives to keep costs, particularly import costs, as low as possible. For example, some companies ship products unassembled to help reduce import duties. Poland’s accession to the EU has given the price advantage to European producers. U.S. made goods are burdened with customs duties that products imported from other EU countries do not. To level the playing field, some American businesses have opened distribution and/or manufacturing facilities in Europe.
The Polish market is large and expanding for all types of products but is also increasingly competitive. U.S. companies that approach the market with a long -term view to creating market share for their products will reap the rewards.