Comparing two factory quotes on equal terms, without misreading the price

Two factories answering the same brief rarely return strictly comparable quotes. One prices in EXW, another in FOB, a third includes reinforced packaging that the first bills as an extra. Comparing the totals without checking these conditions is like comparing two different products, not two offers for the same product.

The first step of a serious comparison is therefore to identify what each quote actually includes, before looking at the final figure. A higher quote that covers more items can represent a lower total cost than a quote that looks cheaper at first glance.

The Incoterm changes what the price covers. An EXW quote leaves loading, inland transport in China, export customs clearance and international freight on your side. An FOB quote includes delivery to the port and export customs clearance. Comparing an EXW price to an FOB price without adjusting for this creates a gap that reflects no real cost difference.

One solution is to ask each supplier for a quote on the same Incoterm, generally FOB at a Chinese port for a sea container. If a supplier only quotes EXW, have the missing item priced separately with your freight forwarder, to bring both quotes to the same point of comparison.

Unit price varies with the quantity ordered, in tiers that are not always the same from one supplier to another. A quote based on a thousand pieces and another on five thousand pieces are not directly comparable, even if both show a unit price. Bring each quote back to the same reference quantity before judging the price gap.

The minimum order quantity deserves the same attention: a low price paired with a high minimum can tie up more cash than a slightly higher price with an accessible minimum. The real cost of an order depends as much on the required volume as on the price shown.

Two quotes for a visually identical product can differ on points that are not obvious at a glance: material thickness, the exact reference of an electronic component, the brand of a zip, the quality of a lining fabric. These gaps slip easily into a quote that does not spell out every technical specification.

A written brief, sent identically to every supplier consulted, helps avoid this hidden gap between quotes. Without one, each factory interprets the specifications its own way, and the cheapest quote sometimes matches the least well specified version of the product, not the most competitive one.

A useful comparison grid lines up every quote on the same rows: Incoterm, reference quantity, unit price at that quantity, minimum order quantity, production lead time, payment terms, cost of a sample if needed. Any blank or vague line in a quote should be clarified before it goes into the grid, not filled in with a guess.

This grid also serves as a negotiating base: a supplier confronted with a competitor's terms, without knowing their identity, sometimes adjusts their offer on a specific point, lead time, minimum quantity, payment terms, rather than on price alone.

Two quotes with an identical unit price do not represent the same financial commitment if the payment terms differ. A high deposit required before production ties up more cash than a smaller deposit with a balance due on loading. Compare the full payment schedule, not just the deposit percentage.

The stated production lead time deserves the same caution: a supplier who promises a short lead time on paper does not always deliver it once the order is placed. Ask for a production track record on a comparable item rather than relying solely on the lead time stated in the quote.

Sorva builds this comparison grid for you, from quotes obtained on an identical brief from several factories. Our Chinese-speaking team in Guangzhou clarifies directly with each supplier the vague points in a quote before entering it into the comparison: Incoterm, quantity, components, payment terms.

In most cases you pay no fees: you open a file, we negotiate the goods on your behalf, and we take a commission on their ex-factory value.