In the export-oriented handicraft industry, negotiation with foreign partners is a crucial step in the business process. The four main elements of negotiation are price, delivery date, payment method, and guarantee conditions. Among these, pricing is the most critical factor. Quoting is an essential part of the negotiation, but the question remains: who should quote first? Is it better to quote early or later? Are there other options besides direct quotation?
When a new customer sends an inquiry, responding promptly is important, but it's not enough. The challenge lies in setting the right price—too high and you may scare off the customer; too low and they might perceive you as inexperienced or unreliable. Even for returning customers, quoting can be difficult. Prices are tight, and it's hard to find the right balance between profitability and competitiveness.
So, how can you make your quotation effective? Experienced professionals prepare thoroughly before making a quote. They consider the appropriate pricing terms, select the best channels for communication, and take into account contract requirements such as payment methods, delivery dates, shipping, and insurance. By leveraging their overall strengths, they can take control of the negotiation process.
First, thorough preparation is key. Understand the customer’s true needs and motivations. Some clients prioritize low prices, so starting with a competitive offer that aligns with their expectations can increase your chances of winning the order. Mr. Zeng from a Guangzhou-based company explains: “We analyze the customer’s real intent after receiving an inquiry, then decide whether to provide a trial quote or a formal one.â€
Second, conduct market research. With highly transparent and rapidly changing market conditions, staying updated on current trends is essential. Companies must have a deep understanding of both domestic and international markets. Long-term specialized businesses should track historical data and forecast future trends to make informed decisions.
Third, choose the right pricing terms. Pricing terms define the responsibilities and profit-sharing between buyers and sellers. For example, FOB (Free On Board) puts you in a stronger position when freight and insurance costs fluctuate, but it also comes with risks like delays and increased warehousing costs. CIF (Cost, Insurance, and Freight), on the other hand, offers more flexibility for exporters, as the buyer assumes responsibility once the documents are complete.
Many companies now use FOB for initial quotes, allowing customers to compare prices, and then provide CIF options while arranging transportation and insurance locally. This approach gives buyers more choices and helps optimize insurance costs.
Fourth, choose the right quotation channel. Online platforms like Alibaba allow credible members to send quotes directly. When interested in a purchase, you can send a quote via SMS, email, or through trade platforms like Tradelink. These tools help ensure timely communication and keep potential customers engaged.
Additionally, consider other contract terms such as payment methods, delivery time, and shipping details. Negotiating these alongside price can increase flexibility. Adjust your strategy based on the customer’s background, preferences, and the product’s nature. Some customers focus only on price, while others are more willing to negotiate.
Finally, leverage your company’s overall strengths. Confidence in your products and reputation can help you justify higher prices or gain trust from new clients. As Mr. Zeng says, “A professional quote shows expertise and builds credibility.†Before quoting new customers, make sure they understand your company’s strengths and operations. A strong image and good reputation are powerful tools in attracting and retaining business.
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