Two quotations for the same sofa can differ by a large margin and both can be honest. The gap is almost never about one supplier being cheaper. It is about what each quotation actually includes. Learning to read one properly is the most valuable half hour a buyer can spend.
Here is what to look at, line by line.
The product description
Start here and be demanding. A line that says three seat sofa is not a specification. You want the frame material, the foam density, the fabric name and rub count, the leg material and finish, and the overall dimensions.
If the description is thin, ask for it to be expanded before comparing anything else. Two quotations can only be compared when they describe the same object.
The unit price and what sits behind it
Ask what the price is based on. A price for one hundred units is not the price for ten. A price with a customer supplied fabric is not the price with the factory’s own. Confirm the quantity the price assumes and whether it changes at a higher volume.
The delivery term
This is the single biggest reason two numbers look different. A price quoted at the factory gate excludes everything after that point. A price quoted delivered to the port includes inland transport and export handling. A price quoted to your port includes the ocean freight as well.
Find the three letter term on the quotation and know what it covers. If it is missing, ask, because a quotation without a delivery term is incomplete.
Packing
Check whether packing is included and what it consists of. Foam thickness, carton grade, whether items are bagged, whether pallets are used. Also look for the carton dimensions and the loading quantity, since those two figures let you work out your freight cost per item.
A quotation that includes carton sizes and loading data is usually from a supplier who exports regularly.
Tooling, sampling and set up
For custom work there may be one off costs for moulds, jigs, drawings or a sample. These are legitimate and normal. What you want to know is whether they are included in the unit price or listed separately, and whether a sample fee is credited against a production order.
Lead time and its starting point
Look for two things. The number of days or weeks, and what starts the clock. Production time from sample approval is a different commitment to production time from deposit. Write the agreed start point into the order.
Payment terms
The usual structure is a deposit with the balance before shipment. Check the percentages and the timing, and note whether the balance is due before or after inspection, since that affects your ability to resolve a question before the goods leave.
Validity
Quotations carry a validity period because material prices move. If yours does not state one, ask. Knowing you have thirty days rather than an open ended offer changes how you plan the decision.
What is not on the page
Three costs are commonly outside a factory quotation and belong in your own calculation. Ocean or air freight, unless the term includes it. Duty and taxes in your country. Destination handling, customs clearance and inland delivery.
Add these before comparing suppliers, because a factory price is only part of what you will actually pay per delivered item.
Comparing two quotations properly
Put them side by side in a simple table with the same rows. Specification, quantity, unit price, delivery term, packing, carton size, loading quantity, tooling, lead time, payment terms. Fill every cell, asking for anything missing.
Then calculate a landed cost per item for each. That number, rather than the unit price, is what tells you which offer is better. It is common for the higher unit price to win once packing efficiency and container fill are included.
Questions that improve a quotation
A few friendly questions usually produce a better document and a better price. Which parts of this specification are pushing the cost up. Is there an alternative material you work with regularly that performs similarly. What quantity would move this to the next price break. Would a different carton size improve the container fill.
Suppliers generally enjoy these questions, because they show you are planning a real order rather than collecting numbers.
Read a quotation this way and the decision becomes clear rather than confusing. If you would like help comparing offers from makers in Foshan, our team reviews these every week.