How you establish the terms for a working relationship with a factory can really set the tone for the remainder of the production process. The Request For Quotation (RFQ) is thus a crucial step in your China sourcing program for ensuring the timeliness and quality of your production. Here are some tips that can help you set that tone with your manufacturers so that you are able to secure an accurate and professional quote.
Be a Stickler for Details
Make sure to be as detailed as possible with your product description. Even from the beginning stages of quote acquisition you should be very exact with your requirements. Usually a quote request should at least include the following details about your product:
- Size and Dimension
- Intended uses (If it is a new product/invention)
- Order quantities (both initial order and intended annual orders)
- Packaging requirements
- Manufacturing technology requirements
- Drawings, pictures, and blueprints- The more professional the designs you can provide, the more serious your supplier will take your product.
Knowing your product, industry, and production requirements is crucial. Suppliers may think you are submitting an RFQ with them just to get a quote to benchmark their prices with other suppliers. With any new China procurement project, it is important to research the product and industry extensively to make sure you have a full understanding of it when you communicate with the supplier. They will then be much more inclined to share information this way.
What if you don’t provide detailed requirements?
The major risks of failing to give specific details include losing the respect of the supplier and leaving room for unwanted interpretation of your production requirements. Without these details, a supplier could, for example, suspect you of not being the real buyer and will ignore specific details of your product, providing you with an inaccurate or incomplete quote. Similarly, the supplier may not take your request seriously. Remember that you’ll usually get the same effort put into your quote as you put into your RFQ. Make sure it is complete otherwise the supplier can just end up filling in the gaps in your information with their own standards, which often won’t match with your own.
Check the range of your quotes
One clear sign that you have not provided enough details for a quote is if you get a wide range of prices from different suppliers for the same product. This is an indication that the suppliers have “filled in the blanks”, taking liberties with your product details resulting in varying quotations.
Don’t Neglect the Packaging and Shipping
Another important part of an RFQ is the packaging, as different types of packaging will have significantly different prices. For example, one piece/inner per box/master carton compared with the cost of bulk packaging will affect your costs and could ultimately cause the final price of the good to vary from the originally quoted price. Different types of shipping methods will also require different packaging. If you want to ship by air freight, you should let the supplier know beforehand. This will prevent any surprises in your final bill and certainly help to avoid shipping delays.
Convey Your Level of Professionalism
Speak professionally with your suppliers, making sure to use the right terminology to show that you know what you are talking about. This will ensure that your quotation request is taken more seriously. If the supplier does not understand certain terminology this will conversely reflect poorly on their professionalism and experience. However, keep in mind that you must always be wary that the supplier does not simply pretend that they know what they are talking about to avoid surprises further down the road.
In the end, once a professional relationship has been established and built up with your supplier, it will help to further improve communication channels and future projects will benefit. However, always remember that, no matter how stable a relationship might seem, you should never get complacent with Chinese manufacturers.
Compare Quotations From Different Suppliers
The lowest price is not necessarily the best deal. Keep in mind that potential producers may have different standards. Some may offer you a initial discounts hoping to make a good impression to establish good grounds for a future long-term relationship. Alternatively, some may just give you a low quote that they simply can’t uphold. One should be careful in either case, as it is possible that after you place an order, they will later admit that they cannot meet with your requirements typically in either quality or materials. At the point at which you find this out, it has already typically cost time and possibly money. This further shows the importance of being specific in detailing your requirements as well as that of conducting a thorough factory audit.
Remember that often the RFQ is the first point of contact with a supplier and so a major step in setting the stage for the future business relationship between you and your manufacturer; don’t miss this opportunity to frame it according to your terms.
Now we’d like to hear from you. Have you experienced a factory giving an ambiguous quote or one that doesn’t match up with their final bill? How have you learned to protect yourself from this?