Mindset in Reviewing China Price Quotes
Analyze. Dissect. Scrutinize As a buyer, these words should come to mind whenever you think of China price quotes.
When reviewing price quotes from your China vendor, having the proper mindset will be a key factor in successfully handling the quoting phase of the project.
The quotation coming from the supplier to your inbox is not the end of the analysis and thought process.
Never think, “OK, my work is done, I have the quote and I will build my foundation or send this off to my buyer.”
Proper Time is Key
Receiving your China price quote is the time to put on your Sherlock Holmes cap and become an investigator.
When reviewing China suppliers’ quotations, set aside proper time and energy for necessary back-and-forth with the vendor. In fact, whenever you receive the quotation from your supplier, you should immediately say something like:
“We’ve received the quotation, will analyze it and will be back in touch with questions. Look for our follow-up email.”
It’s never wise to review your China price quotes in a hasty manner. I would go one-step further and recommend NOT reviewing your price quotes on-the-go; ie via your smart phone or during commute.
Give yourself a time block to simply sit there with the quotation open in front of you and THINK… Think about what you’re reading, thing about what’s been sent, go back to the start of the project and THINK about up until the point you are at right there and now.
Consider like this: you’ve contacted the supplier and they have now contacted you. That’s about the extent of it. For some vendors, the initial quotation so loose, it’s basically a virtual handshake. “RFQ, meet quote. Quote, meet RFQ”
To the supplier, the quotation phase means: contact has been initiated and you now have a quote between you, something on the table to discuss.
Imagine if you were to meet the supplier face-to-face in their own office and they brought out a document with the quote; you would then discuss it, right? They would sit down across from you and you would go over the quote.
This is the same thing, except it’s by email and you are in your country and they are in China.
Consider China Price Quotes As…
Fluid and incomplete upon receipt.
Assume there are going to be errors, something incomplete or something “off” about the quotation. Normally I preach against assumptions in China sourcing, but this is definitely 1 safe assumption.
Remember that Chinese suppliers have many customers and daily receive myriads of overseas sourcing requests that never come to fruition.
When your supplier quotes, they are not pulling out a stone tablet and a chisel and giving you something that is unchangeable. The supplier does not view their integrity or their own capabilities tied up with whether the quotation is thorough or accurate. To Chinese suppliers, those are distinct issues.
When you sent in the RFQ, was it sent in perfection, with absolutely nothing changing and 100% sure you were going to order?
Or is your RFQ subject to change and the possibility of ordering is based on various contingencies, right?
When your China supplier sends you the price quote, their mindset is, “Here’s our offer, go over this. If something does not look right, talk to us about it, we’ll adjust it accordingly.”
Remember, for many importers, the vendor does not know you and does not know if you are going to order. Therefore the effort the supplier puts into each quotation will vary from vendor to vendor, will be based on if they know you, if they are currently having a high work volume, is the China factory sales contact who is quoting you is experienced…like I said, contingencies.
To put such a high standard on the supplier, of every point being exact IN THE INITIAL QUOTING, is an unrealistic standard in China sourcing.
Accuracy in quoting is a great ideal that should be worked toward. But, the importer should be prepared that the ideal is not always going to be reached. And since you are prepared for the vendor missing the mark on that ideal; you react accordingly, you do not go bananas.
As you grow with a supplier and do reorders and bring more business to the same supplier; as they learn your work style and expectations, inaccurate quoting will decrease.
I do not think that in the quoting phase, the possibility of errors will ever be eliminated. Nor should you.
My own experience backs me up on this and the more we expect errors in China price quotes, the more we avoid the effects of those errors.[mc4wp_form id=”1877″]