A buyer comparing three mills reads the quotes line by line. The mill whose quote is clear, complete and easy to check is the one that gets the next call. A good FOB quote is a sales tool as much as a price list.
Start with what FOB means
FOB (Free On Board) under Incoterms 2020 means the mill, as seller, delivers the goods on board the vessel at the named port of shipment, clears them for export and pays the costs up to that point. The buyer takes over cost and risk from there, including sea freight and insurance. Name the port in the quote, for example “FOB Nhava Sheva” or “FOB Chennai”, because the price only makes sense with a named place.
Build the cost from the ground up
- Yarn. Count, ply, blend and current market price. For cotton, yarn is usually the biggest single line.
- Weaving or knitting. Construction, thread count or pile, loom efficiency and wastage.
- Processing. Bleaching, dyeing, finishing, softener, and any special treatment the buyer asks for.
- Cutting, stitching and finishing. Hems, borders, labels and quality checks.
- Packing. Polybags, inner and outer cartons, labels and carton marking.
- Inland transport and port charges. Factory to port, loading, export documentation and customs clearance.
- Margin. A fair margin that leaves room for the occasional rework or claim.
Keep export incentives such as RoDTEP and duty drawback outside the base price build-up unless you have decided deliberately to pass them on. Their rates change, and a price that depends on them is harder to defend.
Specify the product in the quote
A price without a specification invites a dispute. Each line should state the product name, size, GSM or weight, construction, fibre content, colour, finish and packing. Reference the approved sample by its sample number so there is no doubt about what the price covers.
The terms that make a quote trustworthy
- Validity period. State the date until which the price holds. Yarn prices move, and a clear validity protects you.
- Currency and exchange clause. Quote in a stable currency such as USD, and say what happens if the exchange rate moves beyond an agreed band before payment.
- MOQ and tolerance. Minimum order per design and colour, and the quantity tolerance, usually expressed as a percentage either way.
- Lead time. Count from the day the buyer confirms the order and approves the pre-production sample.
- Payment terms. Advance, letter of credit or other terms, with the milestones written out.
- Sample policy. Whether samples are free, charged or credited against the first order.
What buyers compare
Buyers lay quotes side by side and check whether they describe the same product. They look at the price per piece against the price per kilogram, the GSM actually delivered, the packing method, the lead time and the payment terms. A mill that fills in every field makes that comparison easy and is more likely to be shortlisted on the merits of its product.
Putting it together
Build the price from real costs, name the port, specify the product, and write the terms down. Celeris Exim helps Indian mills prepare buyer-ready quotes and introduces them to hospitality buyers on a commission-only basis.