My question relates to pricing within a tender document or a formal proposal. Does pricing it it lower than everyone guarantee me to win the tender?
This is an extremely common question and one which is highly complex and i’m afraid is different every time, but in order to help you work out exactly how to price things focus on these 3 areas to make your decision:
- How is the tender to be evaluated? If it states that 80% is price led, then it would be wise to consider putting your best possible price, after all if 80% is weighted to this factor, then it’s obviously very important to your buyer
- How low can you go? By this I mean are you often the market leader for price? or are you regularly beaten on price by your rivals? Consider whether you actually want to supply your goods or services based on price alone
- What market place is the buyer in? The reason for asking this is that you are often given clues, such as “we are having tough trading times” from the buyer and this indicates whether price is a factor or not.
The important factor to remember is that you have to be able to carry out the agreement once you have given your prices, and these are often fixed for a period of time, so ensure that you are comfortable with the pricing you submit. Plus in addition it often states that within a tender, the buyer is not obliged to contract with the supplier who has the lowest price. (this is done to ensure that they are not provided as a loss leader)