TL;DR: How to charge different $$ in different countries

issued on:

June 2, 2025

author:

Ulrik Lehrskov-Schmidt

Lots of my customers ask about charging different prices in different countries.

And it makes sense: US wants to pay more than Europe, who wants to pay more than China.

So the same price - 100 - might be too cheap in one country and unsellable in another.

In theory a flat 100 might get you this:

US: 100EU: 100China: 0 (no sale)= 200 revenue While a differentiated or localised pricing might get you:

US: 120
EU: 100
China: 80
= 300 revenue - a 50% uplift!

Nice… except for the boatload of complexity you just took on:

Multiple currencies.
Multiple SKU's in your billing system
Regional differences to product and packaging.
Differentiated contracting.
… and the joker in the room: who - exactly - decides those 120-100-80 price points?

The net result in 90% of cases is the following:

Control of pricing drifts out to local heads of sale
Pricing discipline drops as local heads of sale over-use discounts to hit targets
Decentralised pricing leads to local deals with a lot of bespoke terms, re-bundling of products etc.
Vastly complex billing and contracting system with loads of technical and commercial debt
Harder to roll out new product uniformly across geographies.

So generally I advice customers to avoid price localisation until they hit at least $10M ARR - and even then, try to push until $30M

‍How to do it:

If you are less then $10M ARR: don't do it.
If you are $10-30M ARR : you can do it, but expect this to add as much cost and complexity as it delivers revenue
If you are above $30M revenue: consider it for real.
In all cases: if in doubt. Don't localise.

If you have to do it, here is how:

If you are to do it, here is how:
Make a list of all the countries you might sell in
Divide them into multiple tiers - eg. Tier 1, 2, 3 and 4.
Assign a currency to each tier - e.g. USD, USD, EUR and GBP
Pick one tier as the 'base tier'. This is usually your largest market / home market.
Set prices for this Base Tier and consider them index 100.
Now set indexes for the remaining tiers - e.g. 100, 120, 80, 70.
Now convert the Base tier prices into those indexed prices and convert to the currency for that tier.
Adjust the pricing for each tier to 'make it pretty' (e.g. $9.822 → $9.99 and £254.43 → £250 etc.)
Sell on these price lists.
Next year: repeat steps 6 to 10.

Then also review those once a year - and only once a year. Control it centrally.
As promised: a point about pricing, every Monday.

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