What does a High Quotation Mean?

If the buyer does not care about the details, why should the vendor? One of the reasons could be “Just make it a high price to cover our backsides”.

Vague, non-specific requests lead to “price padding”: a higher price just in case a new quote means a lower price later. Most inquiries from small buyers are too vague, especially promotional products and retail items. No matter where a quick, unprofessional inquiry causes so many questions; you can’t blame the vendor who is forced to guess.

Different quality level considered:

A high price might be because factors of the job there are not necessary for your specific case. Different processes are applied, which may not suit your needs. This in turn may increase (or decrease) your costs. Do you need the additional layer of packing? Do you need the more high-end piece?

In most cases, the quote is high because the use of the product isn’t on the original RFQ. Is it for promotional item or a more long-term use (to be a short-term use item while high perceived value, let the factory know. If you do not need a quote for higher-end caliber material, let the factory know. The more specific information you provide in the last brief, the more precise the factory is in quoting.

Small quantity:

Small quantities can mean high prices. This does not mean the vendor is not quoting properly; however, smaller runs simply warrant a higher quote in the particular case. Smaller runs have material waste, actually take more quality control and look expensive because a base price is still required. When that is proportioned over a small quantity, it makes each unit look expensive. The truth is the math.

About the author

David writes about economic activity throughout Southeast Asia and specializes on international trade relating to China. In addition, he holds a Masters Degree in Economics from Peking University.
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