Quotations
After receiving the letter of enquiry from a prospective buyer, the sellers supply the relevant information by writing a letter that is called quotation letter. These letters are written keeping in view the information asked for like price list, mode of payment, discount to be allowed etc. Businessman should reply to the inquiries carefully and promptly.
It is a reply by the seller to the prospective buyer. Hence, the quotation letter should be prepared carefully by the seller. It should contain information on all points mentioned in the inquiry letter.
The seller should send the best possible quotation so that it induces the buyer to place an order because it is the basis on which the interested buyer decides whether to buy or not.
A letter of quotation is any letter written in reference to the price of a service or product. This could range from a customer or client requesting or accepting a quote, to the supplier or service provider sending the quote amount. Either of these letters could be headed as a letter of quotation.
The quotation may contain the following points :-
- Details about quality of goods offered for sale.
- Details about quantity of goods offered for sale.
- Type of quotation.
- Sale price per unit of the commodity.
- Term of payment like Cash or Credit, trade discount, cash discount and other allowances if any.
- Time, mode and place of delivery.
- Details of duties, Octroi, etc., payable.
- Details of packing, labelling, insurance, etc.
- Net price payable.
- E and O.E. (errors and omissions expected)
Inviting quotations
It is important for a business organisation to invite quotations from several sellers before placing an order.This is done to find out the cheapest and best source of supply of goods required.A great care is necessary in drafting such letter so that right seller can be located as quickly as possible.The Inviting quotations letters should include following points:
- Describe the need clearly and precisely.Give detailed specifications such as the shape,size,quality,make etc. of the goods you require.For example if you need to buy inverters, give the exact numbers,watt hours,size,guarantee period,shape,make and quality.
- Request the seller to quote his prices and terms of payment.
- Ask him for a sample,if necessary.Sometimes the buyer may already be possessing the sample and in the Inviting Quotations,he can specify specify that the sample can be seen from his office before quoting rates.In case,he does not have the sample,he can ask for a sample if required.
- Give an idea of the quantity you intend to buy.
- Indicate the time by which you would like the goods to be supplied.this will help the seller determine whether during the periods available he will be able to meet your demand or not.
- Ask if the goods guaranteed and if so,for what period.Also ask the seller to give an idea of the normal expected like of these goods.
- Ask what accessories and spares,if any would be supplied and how much they cost.
- If the goods you are ordering need installation,ask the seller the cost of doing so and also the repair facilities offered by him.For example computers are required to be installed by expert technical persons.In such cases,ask the supplier as to how much he will charge for the same and whether or not there will be repair charges.
- As the processing of a purchase proposal takes some time,ask the seller to indicate the period for which his quotations will be valid.
- Independently ask for tax components.In addition to the basic price of the good,there will be few taxes such as Sales tax,Central Tax,VAT etc. which may be paid by the buyers.
