Task 1. Read and discuss the following lead-in

QUOTATION OF TERMS IN REPLY TO AN ENQUIRY ASKING FOR CERTAIN CONCESSIONS

Task 1. Read and discuss the following lead-in

An offer of goods is usually made either by way of advertisements, circulars and letters, or in reply to an enquiry. In response to an enquiry you may want to give your prospective customer a quotation which constitutes an offer to deliver goods at the price and on the terms and conditions stated. Your quotation should cover the following subjects:

(a) PRICES. When a supplier quotes a price, he may or may not include other costs and charges such as transport, insurance and taxes. Prices which include these extra costs are known as gross prices; those which exclude them are known as net prices. A firm’s quotation is not necessarily binding, i.e. they do not always have to sell you the goods at the prices they quoted in their reply to an enquiry. However, when prices tend to fluctuate, the supplier will add a provision to their quotation stating that their prices are subject to change. If the company makes a firm offer, it means they will hold the goods for a certain time until you order. Again, this is not legally binding, and this provision varies in different countries depending on local regulations and trading practices, but suppliers generally keep to their offer to protect their reputation. When prices are quoted in the customer’s currency they should allow for exchange fluctuations.

(b) TRANSPORT AND INSURANCE COSTS. The International Chamber of Commerce uses a set of terms for delivery in overseas contracts – these are called Incoterms. Their use is optional, but suppliers normally refer to them in their quotations.

(c) DISCOUNTS. Manufacturers and wholesalers sometimes allow discounts to be deducted from the net or gross price. They may allow a trade discount to sellers in similar trades; or a quantity discount for orders over a certain amount; or a cash discount if payment is made within a certain time, or a loyalty discount when firms have a long association.

(d) METHODS OF PAYMENT. When quoting terms, you may require, or at least suggest, any of several methods of payment.

(e) DELIVERY DATES. If the enquiry specifiesa delivery date, confirm that it can be met, or if not, suggest an alternative date. Do not make a promise that you cannot keep.

(f) FIXED TERMS AND NEGOTIABLE TERMS. It is possible to quote terms in two ways: by stating your price and discounts without leaving room for negotiation, or suggesting that the customer could write again and discuss them.