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RFx: the concept that drives strategic sourcing

<p>Product quotation or price quotation has a decisive role in how competitive a company's performance can be. This is because, in general, all costs incurred along the <a style="color: rgb(82, 139, 196);" rel="noopener noreferrer" href="https://neogrid.com/en/blog/supply-chain-network">supply chain</a> with the purchase of inputs, or with the acquisition of raw materials or stock, directly impact the final price of deliveries, which will result in directly affecting the level of market competitiveness.</p><p>In this context, although it is not an absolute rule, higher costs imply more expensive products for the consumer - a factor that can interfere in sales in a very significant way. Facing this reality, product quotation plays a fundamental role, as it translates into one of the most efficient strategies for making more strategic purchases and with greater savings.</p><p>Next, we've prepared a full post to address the topic and show you the best practices for making quotations. Read on and learn more!</p><h2><strong>What is product and price quotation and how does it work?</strong></h2><p>Quotation is nothing more than the process that precedes a company's purchases. It is through this activity that the procurement sector is able to make acquisitions more assertively, comparing prices, products, and suppliers, in order to identify the offers that are most in line with the business needs.</p><p>In general, quotations work based on market research. Its most basic, though not exclusive, function is to identify the best purchasing opportunities, considering, in most cases, price.</p><p>However, depending on the company's needs, the quotation can be carried out based on a broader and more strategic planning. Thus, in addition to price, other variables can be considered in this research, such as product quality, delivery time, volume, competitive advantages, social, environmental, and other issues.</p><h2><strong>What is the importance of strategic action in this scenario?</strong></h2><p>Product quotations, in practice, increase the decision-making power of commercial managers. By establishing a purchase plan and conducting research with different suppliers, the probability of identifying the most advantageous offers is even greater.</p><p>At this point, the quotation emerges as a strategic tool for companies that want to optimize their costs, making the best purchases, with the lowest prices and in accordance with the characteristics and requirements previously established.</p><p>Especially in highly competitive segments, such as retail, quotations are essential for closing commercial agreements with suppliers, as they guarantee greater bargaining power, better equalizing the interests of both parties involved.</p><h2><strong>Differences between quotation and budget</strong></h2><p>Price quotations and budgets are not the same thing, but confusion about these two terms is common. A good manager must know the characteristics of each of these processes and know how to differentiate between them, so, we brought this topic to the post.</p><h3><strong>Price quotation</strong></h3><p>Price quotation is the procedure under responsibility of the procurement sector, which consists of mapping the prices of a specific product or service on the market. In summary, the responsible employee does much more than researching prices, analyzing the following points:</p><ul><li>payment terms;</li><li>product technical specs;</li><li>quality of the goods;</li><li>different brands on the market.</li></ul><h3><strong>Budget</strong></h3><p>The budget is quite different from the price quotation. In fact, it takes care of forecasting a company's expenses and revenues, therefore, it is linked to its strategic planning.</p><p>Note that the budget can set the procurement sector spending limit. Thus, to adapt to these figures, one must invest in price quotations and focus on finding the best proposals.</p><h2><strong>9 best practices for optimizing product quotations</strong></h2><p>There are different actions that can be taken to make a company's price quotations even more productive. Below, we highlight some best practices that can be applied for this purpose. Let's see them!</p><h3><strong>1 - Obey the price quotation rules</strong></h3><p>We've already introduced you to the price quotation rules and, of course, you need to follow them to the letter. Remember each of these techniques and strive to comply with these assumptions, as this will bring gratifying results to your negotiations and finances.</p><h3><strong>2 - Carefully evaluate your suppliers</strong></h3><p>The market is full of suppliers, but not all of them are efficient and able to serve your business properly. Therefore, you need to focus on evaluating the reputation, credibility, and infrastructure of your potential partners.</p><p>Ideally, you should join companies that offer good prices as well as have the physical and financial conditions to fulfill the contract. When this last item is not considered, there is a risk of suffering from delays in the replenishment of raw materials and compromising the entire supply chain.</p><h3><strong>3 - Know the available budget</strong></h3><p>There is no way to start a negotiation without knowing the available budget. Keep in mind that your purchases are financially limited and that complying with this rule helps your business operate in a healthy manner.</p><p>Contracts that exceed the budget limit can put the business in the red and compromise other sectors. Hence, always have the latest budget for your area at hand.</p><h3><strong>4 - Define which materials will be needed</strong></h3><p>Before you even start quoting prices, it is important to know your needs. This is because the purchase of raw material must be coherent and enough to ensure that production meets consumer demands.</p><p>For that, the best strategy is to focus on integration with retailers and collect consumption data at the point of sale. When this information is part of your planning, waste and losses are much smaller.</p><h3><strong>5 - Work with a comparison base with at least 3 options</strong></h3><p>One of the premises of product quotation is comparison. Therefore, it is highly recommended to work with a minimum base of offers, so that you can have a broader view of the options available on the market.</p><p>With more options available, the quotation tends to be more reliable and strategic, increasing the likelihood that commercial managers will find more advantageous offers. In addition, variety makes it easy to compare attributes, which is key to more productive negotiations.</p><h3><strong>6 - Negotiate every detail of deliveries</strong></h3><p>Negotiation is one of the pillars of any product quotation. It is at this point that the company manages to determine its conditions, get the answers for any questions, and bargain for discounts, for example. In many cases, the best results in quotations are only obtained after strategic negotiations, in which the parties involved manage to reach proper balance between their interests.</p><h3><strong>7 - Understand how quantity affects quotations</strong></h3><p>In the context of business purchases, the relationship between quantity of goods and price tends to have an inverse relationship. In other words, as a rule, the larger the purchase, there is a tendency of a lower cost per unit for the product.</p><p>Considering this premise, it is very important to assess the best conditions for the quotation and for completing purchases. In certain cases, buying in large quantities can be a way to optimize costs, but on the other hand, it can entail extra expenses with the maintenance of large inventories.</p><p>Consequently, it is essential to make decisions based on data, evaluating, for example, the demand level for each product. This way, it is easier to quote the ideal volume to balance inventory and price.</p><h3><strong>8 - Have solid partnerships, but don't depend on a single supplier</strong></h3><p>Although it is highly beneficial for the company to <a rel="noopener noreferrer" href="https://neogrid.com/en/blog/how-important-collaboration-between-retailers-manufacturers">strengthen the relationship</a> with suppliers, making it more solid and lasting, it should not rely exclusively on a single partner.</p><p>This type of situation can create a range of risks, such as delays in supply, changes in product quality and price adjustments.</p><p>In this sense, we recommend always having alternatives for purchases, resorting to other suppliers whenever circumstances demand.</p><h3><strong>9 - Explore the potential of new technologies</strong></h3><p>As well as countless other processes that are part of the business reality, product quotation can also be greatly benefited by technology. Currently, many companies have broken away from outdated quotation models based on manual processes and mechanical contacts and have embraced the process optimization provided by software.</p><p>In the era of data and technological transformation, one of the most promising and effective ways to improve the business purchasing process is through investments in specialized solutions and tools.</p><p>The market already offers extremely comprehensive <a rel="noopener noreferrer" href="https://neogrid.com/en/solutions/strategic-sourcing">sourcing tools</a>, which simplify contact with suppliers and optimize contract management, especially when in large volumes. Thus, for example, with quotation data gathered in a single place and supported by automated analytics, companies can optimize decision-making, as well as reduce the operational effort of the procurement sector.</p><p>Understand how technology can be an important ally to achieve more efficient, organized, and cost-effective purchases.</p><p>Moreover, computerized solutions offer flexibility for the process, allowing the definition of different parameters and rules for the quotation, which increases the value of the offers and ensures results that are even more in line with the company's needs.</p><p>Finally, as can be seen, product quotation is a task of vital importance for companies. When developed efficiently, it is the key to reducing costs and also to maintaining operations, ensuring the availability of inputs and raw materials, for example.</p>

<p>Product quotation or price quotation has a decisive role in how competitive a company's performance can be. This is because, in general, all costs incurred along the <a style="color: rgb(82, 139, 196);" target="_blank" rel="noopener noreferrer" href="https://neogrid.com/en/blog/supply-chain-network">supply chain</a> with the purchase of inputs, or with the acquisition of raw materials or stock, directly impact the final price of deliveries, which will result in directly affecting the level of market competitiveness.</p><p>In this context, although it is not an absolute rule, higher costs imply more expensive products for the consumer - a factor that can interfere in sales in a very significant way. Facing this reality, product quotation plays a fundamental role, as it translates into one of the most efficient strategies for making more strategic purchases and with greater savings.</p><p>Next, we've prepared a full post to address the topic and show you the best practices for making quotations. Read on and learn more!</p><h2><strong>What is product and price quotation and how does it work?</strong></h2><p>Quotation is nothing more than the process that precedes a company's purchases. It is through this activity that the procurement sector is able to make acquisitions more assertively, comparing prices, products, and suppliers, in order to identify the offers that are most in line with the business needs.</p><p>In general, quotations work based on market research. Its most basic, though not exclusive, function is to identify the best purchasing opportunities, considering, in most cases, price.</p><p>However, depending on the company's needs, the quotation can be carried out based on a broader and more strategic planning. Thus, in addition to price, other variables can be considered in this research, such as product quality, delivery time, volume, competitive advantages, social, environmental, and other issues.</p><h2><strong>What is the importance of strategic action in this scenario?</strong></h2><p>Product quotations, in practice, increase the decision-making power of commercial managers. By establishing a purchase plan and conducting research with different suppliers, the probability of identifying the most advantageous offers is even greater.</p><p>At this point, the quotation emerges as a strategic tool for companies that want to optimize their costs, making the best purchases, with the lowest prices and in accordance with the characteristics and requirements previously established.</p><p>Especially in highly competitive segments, such as retail, quotations are essential for closing commercial agreements with suppliers, as they guarantee greater bargaining power, better equalizing the interests of both parties involved.</p><h2><strong>Differences between quotation and budget</strong></h2><p>Price quotations and budgets are not the same thing, but confusion about these two terms is common. A good manager must know the characteristics of each of these processes and know how to differentiate between them, so, we brought this topic to the post.</p><h3><strong>Price quotation</strong></h3><p>Price quotation is the procedure under responsibility of the procurement sector, which consists of mapping the prices of a specific product or service on the market. In summary, the responsible employee does much more than researching prices, analyzing the following points:</p><ul><li>payment terms;</li><li>product technical specs;</li><li>quality of the goods;</li><li>different brands on the market.</li></ul><h3><strong>Budget</strong></h3><p>The budget is quite different from the price quotation. In fact, it takes care of forecasting a company's expenses and revenues, therefore, it is linked to its strategic planning.</p><p>Note that the budget can set the procurement sector spending limit. Thus, to adapt to these figures, one must invest in price quotations and focus on finding the best proposals.</p><h2><strong>9 best practices for optimizing product quotations</strong></h2><p>There are different actions that can be taken to make a company's price quotations even more productive. Below, we highlight some best practices that can be applied for this purpose. Let's see them!</p><h3><strong>1 - Obey the price quotation rules</strong></h3><p>We've already introduced you to the price quotation rules and, of course, you need to follow them to the letter. Remember each of these techniques and strive to comply with these assumptions, as this will bring gratifying results to your negotiations and finances.</p><h3><strong>2 - Carefully evaluate your suppliers</strong></h3><p>The market is full of suppliers, but not all of them are efficient and able to serve your business properly. Therefore, you need to focus on evaluating the reputation, credibility, and infrastructure of your potential partners.</p><p>Ideally, you should join companies that offer good prices as well as have the physical and financial conditions to fulfill the contract. When this last item is not considered, there is a risk of suffering from delays in the replenishment of raw materials and compromising the entire supply chain.</p><h3><strong>3 - Know the available budget</strong></h3><p>There is no way to start a negotiation without knowing the available budget. Keep in mind that your purchases are financially limited and that complying with this rule helps your business operate in a healthy manner.</p><p>Contracts that exceed the budget limit can put the business in the red and compromise other sectors. Hence, always have the latest budget for your area at hand.</p><h3><strong>4 - Define which materials will be needed</strong></h3><p>Before you even start quoting prices, it is important to know your needs. This is because the purchase of raw material must be coherent and enough to ensure that production meets consumer demands.</p><p>For that, the best strategy is to focus on integration with retailers and collect consumption data at the point of sale. When this information is part of your planning, waste and losses are much smaller.</p><h3><strong>5 - Work with a comparison base with at least 3 options</strong></h3><p>One of the premises of product quotation is comparison. Therefore, it is highly recommended to work with a minimum base of offers, so that you can have a broader view of the options available on the market.</p><p>With more options available, the quotation tends to be more reliable and strategic, increasing the likelihood that commercial managers will find more advantageous offers. In addition, variety makes it easy to compare attributes, which is key to more productive negotiations.</p><h3><strong>6 - Negotiate every detail of deliveries</strong></h3><p>Negotiation is one of the pillars of any product quotation. It is at this point that the company manages to determine its conditions, get the answers for any questions, and bargain for discounts, for example. In many cases, the best results in quotations are only obtained after strategic negotiations, in which the parties involved manage to reach proper balance between their interests.</p><h3><strong>7 - Understand how quantity affects quotations</strong></h3><p>In the context of business purchases, the relationship between quantity of goods and price tends to have an inverse relationship. In other words, as a rule, the larger the purchase, there is a tendency of a lower cost per unit for the product.</p><p>Considering this premise, it is very important to assess the best conditions for the quotation and for completing purchases. In certain cases, buying in large quantities can be a way to optimize costs, but on the other hand, it can entail extra expenses with the maintenance of large inventories.</p><p>Consequently, it is essential to make decisions based on data, evaluating, for example, the demand level for each product. This way, it is easier to quote the ideal volume to balance inventory and price.</p><h3><strong>8 - Have solid partnerships, but don't depend on a single supplier</strong></h3><p>Although it is highly beneficial for the company to <a target="_blank" rel="noopener noreferrer" href="https://neogrid.com/en/blog/how-important-collaboration-between-retailers-manufacturers">strengthen the relationship</a> with suppliers, making it more solid and lasting, it should not rely exclusively on a single partner.</p><p>This type of situation can create a range of risks, such as delays in supply, changes in product quality and price adjustments.</p><p>In this sense, we recommend always having alternatives for purchases, resorting to other suppliers whenever circumstances demand.</p><h3><strong>9 - Explore the potential of new technologies</strong></h3><p>As well as countless other processes that are part of the business reality, product quotation can also be greatly benefited by technology. Currently, many companies have broken away from outdated quotation models based on manual processes and mechanical contacts and have embraced the process optimization provided by software.</p><p>In the era of data and technological transformation, one of the most promising and effective ways to improve the business purchasing process is through investments in specialized solutions and tools.</p><p>The market already offers extremely comprehensive <a target="_blank" rel="noopener noreferrer" href="https://neogrid.com/en/solutions/strategic-sourcing">sourcing tools</a>, which simplify contact with suppliers and optimize contract management, especially when in large volumes. Thus, for example, with quotation data gathered in a single place and supported by automated analytics, companies can optimize decision-making, as well as reduce the operational effort of the procurement sector.</p><p>Understand how technology can be an important ally to achieve more efficient, organized, and cost-effective purchases.</p><p>Moreover, computerized solutions offer flexibility for the process, allowing the definition of different parameters and rules for the quotation, which increases the value of the offers and ensures results that are even more in line with the company's needs.</p><p>Finally, as can be seen, product quotation is a task of vital importance for companies. When developed efficiently, it is the key to reducing costs and also to maintaining operations, ensuring the availability of inputs and raw materials, for example.</p>

9 best practices for optimizing product quotations

Conducting strategic and efficient product quotations can make a huge difference in your results. Check out some best practices!

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