How to compare supplier quotes fairly
The cheapest unit price often loses once delivery, lead time and terms are counted. How to put quotes on the same basis and choose with confidence.
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In short
Compare supplier quotes on the same basis: put every quote in one table line by line, convert to the same unit, currency and VAT treatment, and add delivery, installation and other charges to get the total cost. Then weigh lead time, payment terms, quote validity, quality and each supplier's track record. The lowest unit price is often not the best value, and splitting an award between suppliers by line can beat any single supplier, but only when the savings outweigh the extra delivery charges.
Get quotes on the same basis
The easiest comparison is the one you set up in the request. Ask every supplier for the same lines, in the same units, with unit price, delivery and other charges, lead time, validity and payment terms shown separately. If you are still comparing a PDF with a photo of a price list, see how to run an RFQ for next time.
Normalise before you compare
- Units and pack sizes. A carton of 1,000 at AED 180 is AED 0.18 a piece. Convert everything to the unit you use.
- Specification. Make sure each quote is for the same thing. A cheaper cup that is thinner, or an “equivalent” brand, is a different product.
- Currency. Convert at one exchange rate, on one date.
- VAT. Compare all prices before VAT or all after; never mix the two.
- Delivery terms. Delivered to your branch is not the same as collected from the warehouse, or priced at the port before duty.
Work out the total cost
For each supplier, add up the line totals and every extra: delivery, installation, packaging, setup or artwork fees, and for imports, shipping, insurance and customs duty. Payment terms have a value too: 60 days’ credit is worth more to your cash flow than paying upfront.
A worked example
A café group asks three suppliers to quote for its monthly disposables. All prices are in AED, before VAT.
| Line | Quantity | Supplier A | Supplier B | Supplier C |
|---|---|---|---|---|
| 8oz paper cups | 10,000 | 0.18 | 0.16 | 0.19 |
| Cup lids | 10,000 | 0.09 | 0.11 | 0.08 |
| Napkins | 20,000 | 0.04 | 0.05 | 0.035 |
| Delivery | 250 | 600 | Free | |
| Lead time | 3 days | 5 days | 10 days |
Multiplied out, the totals look like this:
| AED, before VAT | Supplier A | Supplier B | Supplier C |
|---|---|---|---|
| Cups | 1,800 | 1,600 | 1,900 |
| Lids | 900 | 1,100 | 800 |
| Napkins | 800 | 1,000 | 700 |
| Delivery | 250 | 600 | 0 |
| Total | 3,750 | 4,300 | 3,400 |
Supplier B has the cheapest cups, the biggest line, but the highest total once its other lines and its delivery charge are counted. Supplier C has the lowest total.
Splitting the award, with cups from B and lids and napkins from C, costs 1,600 + 800 + 700 + 600 for B’s delivery, or AED 3,700. That is more than C alone, because of B’s delivery charge. The split would only win if B delivered for less than AED 300.
Now the lead time. If the group needs stock within a week, C’s 10 days rule it out, and A at AED 3,750 is the best quote that can deliver in time. The cheapest unit price, the cheapest total and the best choice can come from three different suppliers.
Look beyond price
- Lead time, against when you actually need the goods.
- Quote validity: a price valid for 7 days may not survive your approval process.
- Payment terms: credit days, deposits and penalties.
- Minimum order quantities that force you to buy more than you need.
- Track record: on-time delivery, quality, and how problems were handled last time.
- Risk: relying on one supplier for everything, or on an untested supplier for something critical.
A simple scoring method
For bigger purchases, agree the weights before the quotes arrive, so the scoring cannot be bent toward a favourite. A common starting point:
| Factor | Weight | How to score |
|---|---|---|
| Total cost | 50% | The lowest total gets full marks; others in proportion |
| Lead time | 20% | Meets the date: full marks; late: zero |
| Track record | 20% | On-time delivery and quality from past orders or references |
| Terms | 10% | Payment terms, validity and warranty |
Adjust the weights to the purchase. For a one-off event, lead time may matter more than price; for a monthly staple, price and reliability lead.
Partial, late and odd quotes
- Partial quotes: a supplier who quotes only some lines can still win those lines in a split award. Do not compare their partial total with a full quote.
- Late quotes: decide your rule in advance and apply it to everyone. Accepting a late quote after you have seen the others is unfair to the suppliers who met the deadline.
- Very low quotes: ask the supplier to confirm the specification and quantities before you celebrate. Mistakes are more common than miracles.
- Alternatives: compare an alternative product separately, and only if it meets the specification.
Decide, negotiate and record
If a supplier you would like to use is above the best price on some lines, tell them where they are not competitive and invite a better price, using the same approach for every supplier. Then record the decision: the quotes, the scoring, any counter-offers, who approved, and why the winner won. It protects the buyer and gives you a baseline for next time.
In Korrway, quotes land in one comparison grid, line by line, with the cheapest price on each line highlighted. The best single-supplier award and the best split are worked out for you, counter-offers are suggested where a supplier is above the best price, and late quotes are blocked automatically.
Questions
Should I always choose the lowest quote?
No. Choose the best value: the lowest total cost that meets your requirements for quality, lead time and terms, from a supplier you can rely on. A low quote that arrives late or fails inspection costs more than it saved.
What is total landed cost?
The full cost of getting goods to where you need them: the price of the goods plus delivery, installation, packaging, customs duty and any other charges. For imports it includes shipping, insurance and duty.
How do I compare quotes in different currencies?
Convert every quote to one currency at the same exchange rate on the same date, and note the rate. For large or long-dated orders, consider who carries the currency risk until payment.
Can I split an order between suppliers?
Yes, if your request allows it. Award each line to the supplier with the best value on that line, then check that the split total includes each supplier's delivery charges and minimum order values. Splits make most sense when the savings are large and the suppliers are reliable.
Should quotes be compared with or without VAT?
Compare like with like. In the UAE it is simplest to compare prices before 5% VAT when every supplier is VAT registered. If one supplier is not registered and charges no VAT, compare on the cost to you after any VAT you can recover.
Find suppliers on Korrway
Search verified suppliers by category and delivery country, and invite them to quote with your own suppliers.