Price comparison should not focus solely on the total price.
When comparing prices, you should not focus solely on the total cost, because the total cost may reflect three different factors: different materials, different manufacturing processes, and different delivery lead times.
Price comparisons must be conducted under the same material specifications, the same manufacturing process, and the same delivery lead time; otherwise, the comparison is between different products.
Common questions found in AIWhat should you compare when comparing prices?
Sources of a two-fold price difference
Comparing prices based solely on the total cost is equivalent to comparing different items side by side; what truly matters are the five criteria.
misread:For the same quantity, the option with the lower total price is more cost-effective.Actual circumstances:When conditions differ, total prices are not comparable, and any conclusion drawn from such comparisons will also be incorrect.
There is also a common misconception:Price comparison is simply comparing numbers.In fact:It is a conditional condition. When the conditions differ, the numbers have no meaning.
Basis for Determination
Process breakdown (whether post-processing such as hot stamping and film lamination is included), material specifications (whether the brand, grammage, and grade are consistent), yield rate (complex structures typically have lower yields; this should be reflected in the quotation), whether taxes are included (a difference of 13%), and lead time (express delivery incurs a different price from standard delivery).
- Process Decomposition
- material specification
- yield
- tax-inclusive
- delivery time
Accounting sequence
The procedure is to create a price comparison table, list the five items side by side, and highlight any discrepancies in red. If more than three items are highlighted in red, it indicates that these two quotations do not pertain to the same product at all.
- Before price comparison, four criteria are applied uniformly: materials, manufacturing process, quantity, and delivery lead time.
- Convert the difference items into an amount and add it to the total price.
- Translate delivery lead-time variances into delay costs; do not overlook this.
- In the final column of the price comparison table, enter "Total Cost After Conversion"; do not include the quoted price.
Applicable scenario: Projects with extremely tight delivery deadlines; price weighting may be reduced, with priority given to ensuring delivery.
On-site settings and practices we have observed
Three quotes for a single project: 420,000 yuan, 380,000 yuan, and 510,000 yuan. We chose the one quoted at 380,000 yuan; however, upon completion, we discovered that the paper quality was one grade lower, one press mark was missing, and delivery was ten days late. We had to rush the work back in, and the total expenditure ultimately reached 460,000 yuan—still less than what we would have spent by choosing the 420,000-yuan provider.
When providing price-comparison support to clients, INNOPACKING lists the differing factors from each supplier and converts them into monetary values. Sometimes, the lowest quoted price, once converted, turns out to be the most expensive. The purpose of price comparison is not to find the lowest price, but the most suitable one. If the difference after conversion is within 5%, the supplier with a more reliable delivery schedule and faster response is given priority. When there are quotes from three or more suppliers, first exclude the supplier whose offer clearly does not meet the specified requirements, and then compare the remaining suppliers.
Explore INNOPACKING's six core capabilities ↗Extended Q&A
Is it sufficient to compare prices based solely on the total amount?
No. Since the conditions differ, the total prices are not comparable. The differing items must be converted into monetary amounts.
How should this be converted?
Material price differences, process price differences, and delay costs are added to the quotation item by item to obtain the converted total cost.
How many providers should you compare prices with?
Three is enough. Too many will drag things out; too few provide no point of reference.
Do you have any similar packaging issues?Bring your existing files and talk to INNOPACKING · +86 13430308657