Reading a quotation

Two offers can look close and still differ greatly in details that only show later. Learn to read what is behind the first number.

What a quote must state

• The price per piece and what it includes: fabric, trims, packing.
• Delivery terms: EXW, FOB or others, and where the supplier’s responsibility ends.
• The minimum quantity per colour and size.
• Production time and how long the quote is valid.
• The cost of the sample and whether it is deducted from the order.
• Tooling, mould or print charges if any.
• Payment terms.

FOB and EXW

Under FOB the supplier delivers the goods on board the ship at the port of shipment, and you bear the main freight after that. Under EXW you collect from the factory door and handle everything after. Details can vary with the agreed version, so write the terms down clearly.

Compare by landed cost

An illustrative example: factory price FOB 10, freight and insurance 1.5, duty of 10% on the goods plus freight value (11.5) which is 1.15, other charges 0.85. Landed cost = 10 + 1.5 + 1.15 + 0.85 = 13.5. Compare offers on this number, not the factory price alone.

Exercise

Put the offers of three suppliers into the quote comparison template and see which offer wins when you calculate landed cost rather than factory price.