QUOTATION FOR A PACKING LINE
1. Your firm wants to place an order for ski equipment with a Canadian manufacturer. You ask the manufacturer to give you a 15% quantity discount. The manufacturer does not agree to the discount as it would be uneconomical for them to offer their goods at the discount you suggest as they work on a fast turnover and low profit margins. Then you offer the manufacturer to increase the size of your order up to 10,000 units so that they could grant you the discount. The manufacturer (choose either variant):
Ø agrees to your request on certain conditions (state them);
Ø refuses to agree to your proposal (give reasons).
2. You have received an offer for wallpaper from an American firm. You are interested in the offered goods but you cannot accept the stated price and terms. You arrange a meeting with the firm’s representative and try to make him review the quoted terms and offer more favourable prices.
QUOTATIONS
AND OFFERS
FOCUS 1. Read and discuss the leads-in and the letters
LEAD-IN 1
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An offer of goods is usually made either by way of advertisements, circulars and letters, or in reply to an enquiry. In response to an enquiry you may want to give your prospective customer a quotation which constitutes an offer to deliver goods at the price and on the terms and conditions stated. Your quotation should cover the following subjects:
(a) PRICES.When a supplier quotes a price, he may or may not include other costs and charges such as transport, insurance and taxes. Prices which include these extra costs are known as gross prices; those which exclude them are known as net prices. A firm’s quotation is not necessarily binding, i.e. they do not always have to sell you the goods at the prices they quoted in their reply to an enquiry. However, when prices tend to fluctuate, the supplier will add a provision to their quotation stating that their prices are subject to change. If the company makes a firm offer, it means they will hold the goods for a certain time until you order. Again, this is not legally binding, and this provision varies in different countries depending on local regulations and trading practices, but suppliers generally keep to their offer to protect their reputation. When prices are quoted in the customer’s currency they should allow for exchange fluctuations.
(b) TRANSPORT AND INSURANCE COSTS. The International Chamber of Commerce use a set of terms for delivery in overseas contracts – these are called Incoterms. Their use is optional, but suppliers normally refer to them in their quotations.
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(c) DISCOUNTS.Manufacturers and wholesalers sometimes allow discounts to be deducted from the net or gross price. They may allow a trade discount to sellers in similar trades; or a quantity discount for orders over a certain amount; or a cash discount if payment is made within a certain time, or a loyalty discount when firms have a long association.
(d) METHODS OF PAYMENT.When quoting terms, you may require, or at least suggest, any of several methods of payment.
(e) DELIVERY DATES. If the enquiry specifiesa delivery date, confirm that it can be met, or if not, suggest an alternative date. Do not make a promise that you cannot keep.
(f) FIXED TERMS AND NEGOTIABLE TERMS.It is possible to quote terms in two ways: by stating your price and discounts without leaving room for negotiation, or suggesting that the customer could write again and discuss them.
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QUOTATION FOR A PACKING LINE
| DALLOWAY MANUFACTURING CO. LTD.
21, Crescent St., London SW4.
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Our ref. Your ref.
16 January 20__
AO Russkoe Chudo
Russia, Tula,
Arsenalnaya st., 6
Dear Sirs,
Thank you for your enquiry of 6 January. We have pleasure in sending you our quotation for a complete packing line to pack your products in polyethylene film.
QUOTATION No. M-223-01
ONE COMPLETE PACKING LINE
Model CP-A - ₤15,500.00
Spare parts - ₤5,530.00
Total - ₤21,030.00
The prices stated are f.o.b. London, export packing included, and are firm 21 days.
Terms of payment
Payment is to be made in pounds sterling by irrevocable letter of credit opened in our favour with a first-rate bank.
Delivery
Delivery can be effected within 4 weeks of receiving your order.
We hope to hear from you shortly.
Yours faithfully,
S. King
S.King
Manager
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| 1.2. QUOTATION OF TERMS IN REPLY TO AN ENQUIRY ASKING FOR CERTAIN CONCESSIONS
| MAXINE SPORTSWEAR MANUFACTURING CO., INC.
842 Seventh Avenue, New York, NY 10018
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Our ref. Your ref. 21/7T
12 April 200__
AO Intersport
129511 Russia Moscow
Universitetsky pr. 21
Dear Ms. Kiseljeva,
We are pleased to receive your enquiry of 10 November and to hear that you liked our range of swimwear. The goods stated in your specification are available immediately from stock.
We can offer you the quantity discount you asked us for which would be 5% off net prices for orders over $2,000 and 10% off net prices for orders over $3,000.
We are enclosing our summer price-list quoting f.o.b. prices New York. We normally offer a 15% trade discounts on f.o.b. prices and would prefer payment by sight draft, cash against documents. However, we would be prepared to review this once we have established firm trading relations with you.
As there is a heavy demand at this time of year for swimwear, you will have to allow at least six weeks for delivery.
We hope we can reach an agreement on the terms quoted. Thank you again for your letter; we look forward to your early reply.
Yours sincerely,
Samuel Long
Samuel Long
Export Manager
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