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Unit 7 Quotation, Offers and Counter-Offers

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1 Unit 7 Quotation, Offers and Counter-Offers
Teaching Objectives:  Knowledge Requirements: 1 To enhance students’ awareness of basic knowledge of quotation, offers and counter offers. 2 To enable students to become familiar with the main contents of quotation, offers and counter-offers.  Competence Requirements: 1 To read and translate letters of quotation, offers and counter-offers. 2 To write effective letters on making an offer and counter-offer.

2 Part One Brief Introduction
An offer is an expression of will from the exporter to sell particular goods under the terms and conditions stated (including quantity, prices, time of shipment, terms of payment, etc.). The person making the offer is called the offerer. The person to whom the offer is made is called the offeree. In international trade, offers can be divided into two kinds: firm offer and non-firm offers. An offer is sometimes called a firm offer if it is a definite promise to sell and the terms in the promise will not be changed if it is accepted by a buyer within the given validity time.

3 It must be clear, definite, complete and final
It must be clear, definite, complete and final. Non-firm offers are the ones which are not binding on the sellers and the details of the offers may change in certain situations. An offer letter usually includes the following: 1. An expression of thanks for the enquiry, if any. 2. Name of commodities, quality, and specifications. 3. Price terms, discounts, commission and terms of payment. 4. Packing and date of delivery. 5. The validity period of the offer (for firm offer).

4 It is the buyer’s option to accept or reject or counter-offer during the validity period. If the buyer accepts, then it is a contractual obligation. So no reputable seller would risk his reputation by withdrawing his offer before the stated or agreed time. When a buyer rejects a quotation or other offer, he should write and thank the seller for his trouble and explain the reason for rejection. Not to do so would show a lack of courtesy.

5 The letter of rejection should cover the following points. It should:
1. Thank the seller for his offer. 2. Express regret at inability to accept. 3. State the reasons for rejection. 4. Suggest other opportunities to do business together.

6 A counter-offer is an offer made in response to a previous offer by the other party during negotiations for a final contract. It is a partial or full rejection of the original offer of the seller. In counter-offer letters, the buyer may show his disagreement to certain terms of the offer. To convince the seller of his position, the buyer should give proper reasons to support himself and then state his own proposals. The seller has the right of acceptance or refusal. In the latter case, he may make another counter-offer of his own. This process can go on for many a round till a business is concluded or called off.

7 A counter-offer usually covers the following points:
1. Thank the offerer for his offer. 2. Express regret at inability to accept. 3. State reasons for non-acceptance. 4. Make a counter-offer. 5. Urge the offeree to accept the counter- offer.

8 Part Two Sample Letters
A Firm Offer American Max Import & Export Corp. San Francisco California, America Tel: Fax: March 25, 2003 Beijing Import & Export Corp. 254 Changan Road Beijing China

9 Dear Sirs, Thank you for your enquiry of March 17 for our Butterfly brand bicycles. At your request, we are making you the following offer subject to your reply reaching here before April 16. Item Unit Price ” US$25.00 ” US$27.00 ” US$26.00 ” US$28.00 Payment: By irrevocable Letter of Credit in seller’s favor Delivery Date: Within 90 days after receipt of your order. The above prices are on a CIF San Francisco basis. Please note that commissions are not allowed but 6% discount applies to orders for each item exceeding 1,000.

10 We manufacture and export 10 models of bicycles which are well known for their solid frame, reasonable prices, and attractive design. If you are interested in other models, please see the enclosed illustrated catalogue. We look forward to your order. Yours sincerely, Manager Encl.

11 Sample 2 A Non-Firm Offer
Beijing Import & Export Corp. Beijing , China Tel: Fax: June 1, 2003 Australia Thomas Textiles Co., Ltd 2458 Empire Road, Sydney Australia

12 Dear Sirs, Thank you for your enquiry of May 20. We are pleased to send you samples and all necessary information on Bed Sheets under separate cover. At your request, we are making you an offer, subject to our final confirmation, as follows: Commodity: “Golden Fish” Brand Bed Sheets Price: US $ /pc CIF Sydney Quantity: 5,000 pcs Shipment: August, 2003 Packing: twenty pieces to a carton Terms of Payment: By 100% confirmed irrevocable Letter of Credit in the seller’s favor payable by draft at sight to reach the sellers one month before shipment, and remain valid for negotiation in Beijing till 15th day after shipment. We hope that the above will be acceptable to you, and await with keen interest your formal orders. Yours faithfully, Manager

13 Sample 3 Acceptance of a Quotation Letter
New Africa Import & Export Corporation Lagos , Nigeria Tel: Fax: November 5, 2002 China National Import & Export Corporation 15th Floor, 864 Hongqiao Road Shanghai,China

14 Dear Sirs, Thank you for your quotation of October 10 sending us patterns of Blanket Covers. We find both quality and prices satisfactory and are pleased to give you an order for the following items on the understanding that they will be supplied from current stock at the prices named. Quantity Pattern No Price 300 pcs US$ 25 per piece 450 pcs US$ 26 per piece 300 pcs US$ 28 per piece CIF Lagos We expect to find a good market for these products and hope to place further and larger orders with you in the near future. Our usual terms of payment are cash against documents and we hope they will be acceptable to you. Meanwhile should you wish to make inquires concerning our financial standing, you may refer to our bank—The National Bank of Nigeria, Lagos. Please send us your confirmation of sales in duplicates. Yours faithfully, New Africa Import & Export Corporation Manager

15 Sample 4 A Counter-offer
Australia Thomas Textiles Co., Ltd Sydney, AZ158, Australia Tel: Fax: June 15, 2003 Beijing Import & Export Corp. 254 Chang’an Road Beijing China

16 Dear Sirs, Thank you for your letter of June 1, offering us “Golden Fish” Brand Handbags. However, we regret to tell you that we find the price is too high. Information indicates that the same handbags made in Australia have been sold at much lower price. So if you were to reduce your price by 3%, we might come to terms. Considering our long-standing business relationship, we make you such a counter-offer. We hope you take our suggestion into serious consideration and give us your reply as soon as possible. Yours faithfully, Manager

17 Sample 5 Declining the Counter-Offer
Dear Sirs, Thank you for your letter of June 15, requesting us to allow you a reduction of price by 3% for the captioned goods. Much as we fully appreciate your position and are always willing to support you in your sales efforts, we regret to say that the price we quoted have reflected the furthest we could go. As you know, we operate in a highly competitive market in which we have been forced to cut our price to the lowest level. Thus, it will not be possible for us to accommodate your request for a price reduction. We hope that you can take into consideration the excellent quality of these products and the great popularity they enjoy in your market and accept our favorable quotation as early as possible. We look forward to your order and the opportunity of doing business with you. Yours faithfully, Manager

18 Summary Offer and counter-offer play essential roles in the process of foreign trade. Therefore it is of great significance for us to learn to write letters appropriately regarding this aspect. Much attention should be paid to the contents of an offer and its counter-offer and great importance should be attached to the writing skills of this part during the study.

19 Mode of an offer

20 Mode of a counter-offer

21 Exercise Exercise I Exercise II Exercise III Exercise IV

22 I. Directions: Correct the following mistakes.
1. We feel regrettable that we can’t make you an offer at present. We feel regretful that we can’t make you an offer at present. 2. This company exports a large number of wool every year. This company exports a large amount/quantity of wool every year. 3. Since our products enjoy high reputation in the world market, it is reasonable that the price quoted by us is higher than others. Since our products enjoy high reputation in the world market, it is reasonable that the price quoted by us is higher than that of others. 4. We are not available for export. We have no available goods for export. Or: There are no goods available for export.

23 5. Our company trades in many countries for porcelain.
Our company trades in porcelain with many countries. 6. There are three commissions left unpaid. There are three items of commission left unpaid. 7. Wool is one of the chief exporters of Australia. Wool is one of the chief exports of Australia. 8. Can you supply us this size of shoes? Can you supply us with this size of shoes?

24 II. Directions: Fill in the blanks with proper words.
Dear Sirs, We are in of your letter of March 21 and, as requested, are airmailing you, under cover, one catalogue and samples for our cotton shirts. We hope they will you in due course and will help you in making your decisions. In order to start a concrete transaction between us, we take pleasure in a special offer, subject to our final We trust the price and quality will be to you and await with keen interest your trial Yours truly, receipt separate reach making confirmation acceptable order

25 (B) Dear Mr. Peter, Thank you for your enquiry of April 3 about our coats for men and women. We have pleasure in enclosing our latest catalogue and price list. We hope you will find it of interest. If you require any further detail, please do not hesitate to contact us. Yours truly, Manager Encl.

26 III. Directions: Please translate the following sentences into English.
1. 现向你方报实盘,以你方6月15号复到为条件。 We are making you a firm offer, subject to your reply reaching us before June 15. 2. 我方一客户对你方产品感兴趣并希望能得到对下列商品的报价。 One of our clients are interested in your products and wishes to have your quotations for the goods below. 3. 欣然收到你方三月三日的询盘,现确认今晨回电如下。 We were very pleased to receive your inquiry of March 3 and now confirm our cable of this morning, as follows. 4. 如订购2000台以上,准备特价报盘,每台9.15美元即给5%的折扣。 On condition that you take more than 2000 sets, we are prepared to offer this special price of $ 9.15 per set, a 5% discount. 5. 若此报盘五天内不接受,就做撤销。 This offer must be withdrawn if not accepted within five days.

27 6. 当我们恢复报盘时,我们当立即去电与你方联系。
If you can’t accept, please make a best possible counter-offer. 7. 我们的钢笔价格是每打6美元纽约到岸价。 The price of our pen is US$ 6 CIF New York. 8. 若贵方价格能降低5%,我们将向你方大量订购。 If your price were reduced by 5%, we would place a large order with you. 9. 在与同类产品比较之后,我方认为你方报价偏高。 After careful comparison with similar goods, we find your offer in the high side. 10. 若无法接受,请尽力给一个好的还盘。 As soon as we are in a position to make offers, we shall contact you without delay.

28 An Offer 敬启者: 为复你方4月8号询价,现报价如下,以我方最后确认为准:
IV. Directions: Write letters according to the information given below about offer and counter-offer. An Offer 敬启者: 为复你方4月8号询价,现报价如下,以我方最后确认为准: 4000台激光打印机,每台100美元纽约成本、运费加保险净价,规格见附页,船期八九月。付款要求以保兑的不可撤消的信用证凭即期汇票支付,在装船前30天开出。另邮寄去各种规格的样品及所需要的小册子。 若觉得上述报盘可接受,请来电以便我方确认。

29 Key: Dear Sirs, In reply to your enquiry of April 8, we are giving you an offer, subject to our final confirmation, as follows: Commodity: Laser Printer Specifications: As per attached list Quantity: 4000 sets Price: US$ 100 net per set CIF New York Shipment: August/September Payment: confirmed, irrevocable letter of credit payable by draft at sight to be opened 30 days before the time of shipment. Under separate cover, we have sent you samples of various sizes and the brochure required. If you find the above acceptable, please fax us for confirmation. Yours truly,

30 A Counter-Offer 敬启者: 你方4月26日有关激光打印机的报盘收悉。 我们很抱歉地告知,我们的客户认为你方的价格偏高,现在订购有些犹豫。虽然我们欣赏你方激光打印机的设计和款式以及你们处理我们询盘的方式,但由于竞争者正报给更低价,所以我们无法接受你方报价。 若贵方价格能降低10%,我们将向你方大量订购。 盼佳音。

31 Key: Dear Sirs, Thank you very much for your offer of April 4 for our Laser Printer. We regret to inform you that our clients find your price on the high side and hesitate to place orders. Although we enjoy the design and style of your Laser Printer and the way you have handled our inquiry, we are not in a position to accept your offer at the price quoted, since the competitors are quoting a lower price. If your price were reduced by 10%, we would place a substantial order with you. We are looking forward to your favorable reply. Yours faithfully,

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