What is a quotation?
A quotation is an official document that is submitted by a supplier to a buyer that provides a detailed breakdown of the cost of their product. Once a supplier has provided a quote, they are committed to that price. As a result, a lot of thought needs to be put into it, to ensure all costs have been considered. These costs may include physical materials, labor and taxes, among others. In addition to costs, a quotation will usually include the timeframe in which the supplier is able to provide the product.
Low and high-quality quotations
What is the difference between a low and high-quality quotation?
A low-quality quotation will consist of a generic email that does not address the specific needs of the buyer. The email is addressed generally, rather than to the person that made the inquiry, and instead of offering a solution to the buyer's unique needs, it simply includes a price list of their products for the buyer to sort through themselves.
In contrast, a high-quality quotation is tailored specifically to the needs of the buyer. The email is addressed to the inquirer, and directly responds to points and questions made by the buyer in their request for quotation (RFQ). The email includes a product recommendation based on the buyer's unique needs, and a breakdown of all the costs involved.
What makes a quotation high-quality?
In order to create a high-quality quotation, close attention needs to be paid to the buyer's RFQ. An RFQ will usually include a short introduction to the buyer's company as well as a description of what the buyer is looking for. It's important to conduct further research into the company, and carefully consider the needs they describe, in order to present them with the product that suits their needs the best.
Moreover, the manner in which an RFQ is responded to is also important for demonstrating the professionalism of your company. Where possible, all RFQs should be responded to within 24 hours. If this is not possible, sending a cursory email acknowledging receipt of the RFQ and notifying them of when they can expect to receive a quotation is important. In addition, the language and format of the quotation should be professional.
What is the benefit of a high-quality quotation?
Buyers will often send RFQs to multiple suppliers. If your quotation is of a low-quality, it will immediately be dismissed in favor of quotations that accurately address the buyer's needs. Not only are low-quality quotations less attractive to buyers because they are less helpful to them, but they make the supplier look less professional and capable. As a result, it is crucial to send high-quality quotations to buyers, in order to improve your response rate, and improve your chances of receiving new orders.
How do I create a high-quality quotation?
Provide some background to your company. This is your chance to show your professionalism and get the buyer excited about the opportunity to work with you. You can include some statistics on your production capabilities or annual sales, or explain what it is that makes your company an excellent business partner.
This is where you show the extra research that you conducted to ensure you fully understood the needs of the buyer. Explain their needs back to them to show you understood, present the product that best meets their needs and explain why it's the best choice for them. This is your opportunity to show the value of your product and how it will help the buyer.
State the total price with a breakdown of what it includes, and make sure you also list what is NOT included in the price. You must also state any timeframes. It's important to remember that once a quote has been agreed upon with a buyer, the price of the product, or timeframe in which it will be completed, cannot be changed without both parties agreeing to it in writing. For this reason, make sure your quote is accurate and attainable.
You should end your quotation with a call-to-action, such as a signature or an expiration date for the quotation. This will encourage the buyer to make a decision quickly, and ensure a timely response to your quote. Make sure to send a follow up email message to the buyer if you haven't heard back from them in a certain amount of time, this is particularly important if you include an expiration date, so that the buyer doesn't miss the deadline by mistake.
Quotations are a very important piece of communication between you and a potential buyer. The buyer has already expressed interest in your product through their RFQ, and as a result there is a high likelihood of converting them. In addition, as the first piece of communication with them, it is the buyer's first impression of your business and provides you the opportunity to demonstrate your industry knowledge and competence. It is important that you take advantage of this opportunity to create a high-quality quotation, that will show your professionalism, the value of your product to the buyer, and result in orders for your business.