1. Chapter Four Quotations, Offers and Counter-offers

2. Learning purpose How a buyer writes a letter to request a seller’s quotation. How a seller replies a buyer’s request for quotation. How a buyer writes a letter inviting a seller to make an offer. How a seller writes a letter of making firm and non-firm offer. How a buyer writes a letter to counter-offer. How a seller writes a letter to make a counter- counter-offer letter.

3. What is a quotation Many export transactions, particularly initial export transactions, begin with the receipt of an inquiry from abroad that is followed by a request for a quotation. The preferred method for export is a pro forma invoice, which is a quotation prepared in invoice format. A quotation describes the product, states a price for it, sets the time of shipment, and specifies the terms of the sale and terms of the payment. Since the foreign buyer may not be familiar with the product, the description of it in an overseas quotation usually must be more detailed than in a domestic quotation.

4. The description should include the following 15 points: Seller's and buyer's names and addresses. Buyer's reference number and date of inquiry. Listing of requested products and brief description. Price of each item (it is advisable to indicate whether items are new or used and to quote in U.S. dollars/Euro to reduce foreign-exchange risk). Appropriate gross and net shipping weight (in metric units where appropriate). Appropriate total cubic volume and dimensions packed for export (in metric units where appropriate). Trade discount (if applicable). Delivery point. Terms of sale. Terms of payment. Insurance and shipping costs. Validity period for quotation. Total charges to be paid by customer. Estimated shipping date. Currency of sale.

5. A letter asking for quotation We want to ask for information concerning price or other information interests us. These letters are often written in response to an advertisement that we have seen when we are interested in purchasing a product, but would like more information before making a decision.

6. Contents and organizations 1.Early in the letter, identify the purpose — to obtain help or information (if it's a solicited letter, information about an advertised product, service, or program). 2.In an unsolicited letter, identify who you are, what you are working on, and why you need the requested information, and how you found out about the individual. In an unsolicited letter, also identify the source that prompted your inquiry, for example, a magazine advertisement. 3.In the letter, list quotation or information needed in a clear, specific, and easy-to-read format. (catalogue, product specification, date of delivery, term of payment, etc.) 4.In an unsolicited letter, try to find some way to compensate the recipient for the trouble, for example, by offering to pay copying and mailing costs, to accept a collect call, to acknowledge the recipient in your report, or to send him or her a copy of your report. In a solicited letter, suggest that the recipient send brochures or catalogs.

7. 5. In closing an unsolicited letter, express gratitude for any help that the recipient can provide you, acknowledge the inconvenience of your request, but do not thank the recipient “in advance”. 6. Make sure to include contact information so that the person can easily get in touch with you if necessary, such as your cell or home phone number fax or e-mail address. 7. Include the date by which you need the information, services, etc. that you are requesting, and indicate that you await the reader’s response.

8. Sample letter Read letter 4.3.1 and analyzed how the letter is structured.

9. Dear Sirs, Seeing your advertisement in the American Trade Directory, will you kindly send us as soon as possible your latest price list of Man’s coat, and synthetic fiber goods, with the lowest quotations, together with an illustrated catalogue. We shall be pleased to have you inform us of your best terms and conditions, and also your references, ours is the American Citi Bank, Hong Kong. Your early reply will be appreciated.

10. Reply a letter requesting for quotation An enquiry received from foreign countries must be answered fully and promptly. If the enquiry is from an old customer, say how much you appreciate it. If the enquiry is from a new customer, say you are glad to receive it. The reply to an enquiry should be prompt, courteous and cover all the information asked for.

11. Tips for responding to an inquiry letter requesting quotation Express your appreciation for the person’s interest. If possible, personally respond to the price quotation inquiry. You might want to include with your response letter any brochures, catalogs, reports, or other helpful information available. If appropriate, clearly describe any action you feel the person should take and the reason/reasons for such a recommendation. If you can not personally answer the person’s question, let him/her know that you have contacted the person who can and that he/she will shortly be in touch with the reader. If this is not possible, express your regret for being unable to help the reader, and try to find out for him/her the contact information for someone who can help. Close by saying that you would be happy to help the reader in the future if he/she needs further assistance or by wishing him/her well in his/her endeavor or project, etc.

12. Sample letter Read letter 4.3.3 and analyze how the letter was structured in replying inquiry about quotation.

13. Inviting an offer The buyer can invite the seller to make an offer if the buyer is serious about purchasing the product. An offer is made when a seller promises to sell goods at a stated price within a stated period of time. It is usually a reply made by a seller to the inquiry by a buyer.

14. What is non-firm offer Characteristics of non-firm offer:  An offer without engagement.  No biding force upon the offerer and offeree.  It can be changed, revised and withdrawn at any time.  Functions as a quotation.

15. What is firm-offer firm offer  An offer with engagement, is a promise to sell goods at a stated price within stated period of time known as validity period. Characteristics of firm offer:  The terms and conditions in the offer must be complete, clear,definite and final.  The validity must be clearly stated.  It can not be withdrawn or revoked by the seller within its validity.  It is the buyer’s option to accept, reject or counter-offer during the valid period.

16. How a buyer write a letter to invite a seller to make an offer The letter shall include the following information:  State the source of information.  Briefly introduce yourself if you are a new customer.  Clarify your terms and conditions that invite the seller to make an offer.

17. Sample letter Read letter 4.3.2 and analyze how the letter is structured and arranged.

18. Letter making an offer to inquiry A satisfactory offer shall include the following: 1.An expression of thanks for the enquiry. 2.Name of the goods, quality or specification, quantity, details of price, discounts, terms of payment, time of shipment, and packing conditions so as to enable the buyer to make a decision. 3.The period for which the offer is valid it is a firm offer; otherwise a remark to the effect that the offer is made without engagement. 4.Favorable comments on the goods themselves. 5.A supplementary short paragraph to draw the customer’s attention to other products likely to interest the buyer. 6.An expression of hopes for an order.

19. Sample letter: exporter making a non- firm offer Read letter 4.3.5 and analyze how the letter is structured and what crucial information is included.

20. Sample letter: exporter making a firm offer Read letter 4.3.6 and analyze how the letter is arranged and organized.

21. Counter-offer After receiving a firm offer or a non-firm offer, the offeree will not accept it offhand and unconditionally unless the offer is quite reasonable and to his satisfaction. The buyer shows disagreement to some contents such as the price, packing, shipment, etc. and states changes of terms and conditions to the seller, which can call counter-offer. Counter-offer is virtually a partial rejection of the original offer and also a counter proposal initiated by the buyer or the offeree.

22. How to write a counter-offer letter Thank the seller for his offer. State reasons for expressing regret at inability to accept the offer. Make a counter-offer if it is appropriate. Suggest other opportunity to do business together.

23. Sample letter: importer’s counter-offer Read letter 4.3.11 and analyze how the letter is structured.

24. Counter-counter offer When the seller received the buyer’s counter-offer, and he finds some terms and conditions unacceptable to him, he will state his own opinions in a letter, which is called as counter-counter-offer. In international trade practice, the finalization of a transaction has to go through a series of counter-offer and counter-counter-offer. In a counter-counter-offer letter, the exporter should state the reasons for un-acceptance and relevant suggestions as per the customer’s counter-offer.

25. Sample letter: counter-counter-offer Read letter 4.3.12 and see how the letter is organized.