Whenever a company intends buy items in bulk from the market, a price quotation is usually requested from different sellers. This enables the buyer to compare prices, technical specifications, if need be, and product quality from different sources. This helps the buyer make the best choice from the pack. Also, this request makes it easier for the seller to understand the buyer’s requirement and intent on the subject matter. It is actually the first step in purchase/supply of any commodity or service in the world of business.
There are numerous benefits attached to using price quotations as a starting point in business transactions. Most importantly, it gives the buyer the opportunity to compare quality and prices of goods and services before making a decision, unlike a monopolized market where there is only one seller available.
Another key benefit here is that such requests help to build relationship between business owners leading to increased opportunities for Business to Business (B2B) transactions. How? You might ask. In most cases, the buyer will write a letter or send an e-mail to the seller showing his interest in a particular item or service. Information like quantity of an item, its intended use, payment procedures and methods will be supplied in addition to the buyer’s contact details. The seller will also respond in same fashion. These interactions usually lead to mutually rewarding relationships in the long run.
Requests for price quotations are avenues for sellers to market other products and services incidental to that requested by the buyer. Company profiles are usually included in these quotations and the spell out all goods and services offered by the company. Also, company brochures can be included in the quotation pack, further exposing the seller to more business opportunities.
Finally, the use of price quotation for choosing sellers breeds competitiveness between sellers. Since price quotations are not only judged based on amount, but other factors which include technical specifications, delivery time, job quality, and previous job experience etc., they strive to ensure that all details are included and properly outlined.
Overall, a very good price quotation acts as your voice in the presence of a buyer, and can be a convincing factor to be the chosen seller.