How to read and compare supplier quotations

Receiving multiple quotations from international suppliers is standard practice, but comparing them accurately requires attention to detail. Prices that look similar on the surface may differ dramatically once you account for Incoterms, payment terms, and hidden costs.

Key Elements to Compare

• Unit price and currency — Ensure all quotes use the same currency or convert them at the same exchange rate.
• Incoterms — An EXW quote will always look cheaper than a CIF quote because it excludes freight and insurance. Normalize all quotes to the same Incoterm for a fair comparison.
• MOQ (Minimum Order Quantity) — A lower unit price with a higher MOQ may not suit your needs.
• Lead time — Production time plus transit time. A cheaper quote with 90-day lead time may cost you more in lost sales than a slightly pricier 30-day option.
• Payment terms — 100% prepayment vs. 30/70 vs. LC at sight. Tying up cash in prepayment has a cost.
• Quality certifications — ISO 9001, CE, FDA, GOTS, etc. A cheaper supplier without required certifications may not be an option.
• Sample cost and lead time — Check whether samples are free or charged and whether the cost is deducted from the first order.

Using Faktorist's Comparison Tool

When you receive bids on a tender, Faktorist automatically generates a side-by-side comparison table with normalized pricing. You can sort by total landed cost, lead time, or supplier rating.