A Quotation is basically a written document prepared by a supplier to provide all the details about his company, product or services, payment terms and other terms and conditions to his prospective clients. Quotation plays an important role in communicating about the products or services offered by a supplier and their costs. A well-composed and to-the point quotation can attract prospective buyers. The first thing that each supplier should keep in mind is the components of the quotation. A good quotation must have:
1) Business profile or the company details : Always provide your business profile in the quotation. It should include the date of establishment, client list, area of work, numbers of employees, etc. Provide the URL of your company’s website so that the buyer can get complete detail about your company from the website. Business profile helps in developing buyer’s confidence and directs that the supplier is authentic.
2) An idea of total cost: A buyer always want to know the pricing first so give a brief idea of prices in the initial parts of the quotations. You can provide detail about what is being charged for what later on but an idea of the cost should be given in first 3-4 pages of the quotation.
3) Variations: Include the details about the variations that can effect the prices mention in the quotation. For example, Any changes in service tax or transportation tariff or reduction in the quantity of the product will effect the prices offered in the quotation.
4) Work schedule: Every buyer is concern about his work and wants to know how much time the supplier will take to complete his work or order. The supplier should share the work schedule with the buyer. For example, the owner of a garment shop wants 1000 ready-made shirts and wants a quotation for it. The supplier should give details for the work schedule:
2 days : Raw Material assessment (Fabric, buttons,etc)
5 days: Stitching time
1 day : packaging time
The work schedule also justifies you delivery time so, please mention that in your quotation.
5) Payment terms and conditions: The terms of payments should be clearly mentioned in the quotation. The payment terms should not be misleading, use sample and easy to understand sentences. Payment terms should include details about the advance payments, the taxes applicable, extra charges for special services, etc. Mention what is being charged for what. For example, a buyer wants to buy 800 toy cars , the supplier should give the cost details:
100 toy cars: INR 1500 (150/piece)
500 toy cars: INR 62500 (125/piece)
1000 toy cars: INR 1,00,000 (100/Piece)
500-100 toy cars: INR 120/piece
Always try to persuade your buyers to buy more by giving better discounts on high quantities.
6) Expiry date of the quotation: Always mention the expiry date of the quotation. It is important to mention the expire date because the cost at which you offering a product or service may charge after 1 month or in some period of time.
7) Payment method: Also mention the method of payment accepted by you. Cash, demand drafts, Direct account transactions, cheques , etc.
8) Time of delivery: Clearly mention the delivery time that will be required for fulfill the order.
General tips :
- Professional look: Make the quotation to look professional. Use the company’s letter head for writing the quotations and use company’s corporate cover head or envelopes while posting or delivering the quotations.
- Emphasis the needs of buyers: Try to emphasis the buyer’s need in quotation. For Example, If a buyer wants to provide a particular product at a lower price to its costumers, the supplier should highlight the who the products offered by him are cost effective.
- Follow-ups: Once you have send a quotation always do the follow-up. Make sure that your quotation is being received by the buyer and the buyer is considering it. Follow-ups also indicates that you are interested in the particular deal.
A Quotation should be clear and specific and should communicate all the required information about the supplier. Try to Prepare quotations in such a way that it wins over the buyer’s confidence. Providing complete and to-the point details can help a supplier in getting more and more buyers.