How to compare supplier quotes:
beyond the unit price
The lowest unit price is not always the cheapest order. What to check, a worked example, and a layout you can copy.
Why the unit price is not enough
Two quotes for the same item can look alike and cost very different amounts. One includes delivery and the other charges for it. One lets you order what you need and the other makes you buy twice as much. Before you compare, put every quote on the same basis: the total cost of getting the goods you need, delivered, when you need them.
What to compare
Landed cost
Landed cost is everything you pay to get the goods to your door. That means the goods, delivery, packaging, and any set-up or tooling charges. For imports, add duty, customs charges and the cost of changing currency. Work out the total for the order, then divide it by the number of units you actually need.
Delivery
Check what delivery costs, where it is to, and how it is described. A quote "ex works" (EXW) means you collect the goods from the supplier's premises, or arrange the transport, and take on the cost and risk from there. For international orders, the Incoterm on the quote sets out who pays for which part of the journey and when the risk passes to you.
Minimum order quantity and price breaks
A low unit price with a high minimum order quantity (MOQ) can mean buying stock you do not need. Count the cost of storing it, the cash it ties up and the risk it is never used. If a supplier offers price breaks, check whether the next break is worth it.
Lead time
Check when the clock starts: from the order, from payment or from approved drawings. A cheaper quote that delivers after your deadline may cost more in the end.
Validity
Note the date each quote expires. A quote that runs out before you can get approval is not much use. If you need more time, ask for an extension early.
Payment terms
Paying 30 days after the invoice is different from paying before dispatch. Paying up front ties up your cash, and leaves you more exposed if something goes wrong.
What is excluded
Read the small print. Common exclusions are delivery, packaging, certificates, tooling, samples, installation and VAT. If one supplier includes something the others leave out, add its cost to the others before you compare.
A worked example
Example only. The suppliers and all the figures below are made up, and all prices are in the same currency. A buyer needs 500 units within four weeks (20 working days), with a test certificate for the order.
| Example | Supplier A | Supplier B | Supplier C |
|---|---|---|---|
| Unit price | 4.00 | 3.60 | 3.80 |
| Minimum order | 250 | 1,000 | 500 |
| Units you must buy | 500 | 1,000 | 500 |
| Goods | 2,000 | 3,600 | 1,900 |
| Delivery | 60 | Included | 150 |
| Test certificate | Included | Included | 50 |
| Other charges | None | None | Set-up 100 |
| Total for the order | 2,060 | 3,600 | 2,200 |
| Cost per unit you need | 4.12 | 7.20 | 4.40 |
| Lead time | 10 working days | 25 working days | 15 working days |
| Payment terms | 30 days from invoice | Before dispatch | 30 days from invoice |
| Quote valid for | 14 days | 30 days | 60 days |
What this example shows:
- Supplier B has the lowest unit price but the highest cost for this order. You must buy 1,000 units to get 500. If you would use the rest later, the cost per unit is 3.60, but you pay 3,600 before dispatch and need space to store them. Its lead time also misses the four-week deadline.
- Supplier A has the lowest landed cost and the shortest lead time. Its quote expires soonest, so you would need to decide quickly or ask for more time.
- Supplier C sits in between. Its quote stays valid longest. You could ask whether it would drop the set-up charge, or include the certificate.
None of this tells you which supplier to choose. Quality, reliability and how a supplier treats you also count. But it shows how the unit price on its own can mislead.
A layout you can copy
Use these as the rows or columns of a spreadsheet, one supplier each.
Supplier
Quote reference
Valid until
Unit price
Minimum order quantity
Units you must buy
Goods total
Delivery cost
Other charges (set-up, tooling, packaging, certificates)
Duty and customs charges (imports)
Total for the order
Cost per unit you need
VAT included? (yes / no)
Lead time, and when it starts
Payment terms
Not included
Notes and questionsBefore you choose
- Ask about gaps. If a quote leaves something out, ask the supplier rather than guess.
- Check every quote answers the same request. If one supplier quoted a different grade or pack size, adjust for it, or ask them to quote again.
- Think before you share prices. Many suppliers expect their quotes to stay private, so be careful about showing one supplier's figures to another.
- Record why you chose. A short note helps the next time you buy, and helps if anyone asks later.
The easiest comparisons start with a clear request. If every supplier gets the same RFQ, their quotes line up. See How to write an RFQ suppliers can price quickly. If you are on the supplier side, see How to reply to a request for quote.