| Your pricing of a tender Should be different to | | | | Tips on Pricing |
| your normal pricing strategy. The first point to | | | | It is important to consider some guidelines when |
| remember is that a scale made through the | | | | preparing your tender price.They include: |
| tendering process can have very good margins | | | | Always submit your lowest possible price for the |
| and that non related costs such as the | | | | service. If you wish to provide additional services |
| advertising, marketing and allowance for bad | | | | then offer separate price for the extra service. |
| debts should not be included in the pricing. | | | | Your price should make you a reasonable profit. |
| Obviously your pricing of a tender will be different | | | | You may in some tender decide to reduce your |
| to your normal pricing strategy. The first point to | | | | margin and break even. You may even make a |
| remember is that a scale made through the | | | | small loss if you have other objectives. These |
| tendering process can have very good margins | | | | could be to keep a team together during difficult |
| and that non related costs such as the | | | | times, or using the project simply for marketing |
| advertising, marketing and allowance for bad | | | | purposes. Be careful about putting in loss making |
| debts should not be included in the pricing. | | | | tenders. The costs may not be worth the risk. |
| People who talk about the tendering market being | | | | Aim to meet or exceed your client’s price |
| competitive are often using their general list price | | | | objectives. That is, try to submit a lower price |
| levels in their tender, which usually have these | | | | than your client expects. You may even try to do |
| additional costs built in. | | | | the job in less time, or do it faster, or with fewer |
| The only real marketing cost associated to a | | | | resources than your client expects. |
| tender is the preparation of the tender response | | | | Try to avoid a single fixed price. This may b |
| itself and in many cases the bulk of this can be | | | | difficult particularly if the client has included a price |
| standardized. | | | | schedule that requires a single fixed price. You |
| Pricing the Services | | | | should then include a price menu that details prices |
| Where a service is being offered, a similar | | | | under various conditions. |
| technique to product pricing can be determined if | | | | Ensure the price of cost schedule has been |
| the service is broken down into clear units. For | | | | completed against all items for which you wish to |
| example, tiling can be broken down to a square | | | | tender. |
| meter price. If your current pricing schedule for | | | | If you are dealing with a product, which is |
| service is not clearly defined to units, it could be a | | | | exceptionally good or difficult to maintain for the |
| very worth while exercise to calculate these | | | | period of warranty, take care of margin before |
| figures to get a better indication of what profits | | | | giving your required price. |
| are really being made when selling to the general | | | | All rates should be quoted in English, both in |
| public. If you are serious about tendering your | | | | figures as well as in words in the schedule of |
| pricing will need to be very accurate. It would not | | | | rates in such a way that manipulation is not |
| be ideal to win a tender to find out it was not | | | | possible. |
| profitable. | | | | Consider all tax related issues carefully before |
| If you have any doubts about your current pricing | | | | arriving at final price. |
| structure and future tender pricing structure, a | | | | Pay extra attention to factors like delivery on |
| cost accounting firm is going to be an excellent | | | | F.O.R or F.O.B basis, octroi paid or to be paid basis, |
| resource to use. | | | | transit insurance, etc. |
| Remember, once your tender price is clearly | | | | If it is important item, take currency fluctuations |
| established, it can be constantly reused to | | | | custom duty, etc. in account. |
| respond to several tenders. | | | | |