An international quotation: what agreements to include

An international quotation for your product is part of your business contact with overseas buyers or suppliers. A quotation is a proposal to supply products. In this article, you will find out more about different types of quotations and what agreements to include in a quotation when dealing with an international partner.

You can make a quotation for a potential customer or request one from a new overseas supplier. Quotations contain information about products, prices, transportation, delivery times, and more. 

Quotation types 

There are two types of quotations. 

• Fixed-term quotation 
  A fixed-term quotation is valid until a certain date. During this period, the supplier is obliged to comply with their offer and cannot withdraw their proposal until after the quotation expires. 

• Free-term quotation 
  A no-obligation quotation has no validity period, so the potential buyer does not have to accept it before a certain date. Before the buyer accepts the quotation, the supplier is free to amend its proposal at its discretion, for example in response to higher raw material costs. Suppliers are also at liberty to withdraw free-term quotations. 

If a potential customer accepts a supplier's offer, an agreement is formed. Customers usually accept a quotation by signing it, but they can also accept it verbally. The problem with verbal contracts is that you have little proof of what was agreed. Accepting a quotation in writing is better, because it strengthens your legal position. 

What to include in a quotation 

Quotations should always be clear and easy to read. Write your quotation in a language your customer understands. International quotations require a bit more thought, because your customer is abroad. The same goes if you are the customer: you need to know exactly what you are committing to. Here are 15 things you should find on any international quotation. 

1. Company details 

The quotation should state your contact details and those of your potential overseas customer. Company details consist of the company name, address, city/town, and country. You should also put your Chamber of Commerce number and your VAT identification number on the quotation, but this information is likely in your letterhead already. 

Ask your customer for their company’s registration number before you draw up the quotation and check it in the foreign register in question. For intra-EU supplies, all you have to do is check the VAT identification number of your customer or supplier. If the numbers check out, include them in the quote. 

2. Issue date and validity period 

If you use an information system like ERP, the system will automatically assign a number and date to the quotation. With a manual quotation, you will have to specify a date and number yourself. Fixed-term quotations have a validity period, while free-term quotations do not. 

3. Exact product description 

When you do business internationally, you will usually sell your products through a catalogue or website and the buyer will not have the chance to see the product before they buy it. Your quotation should clearly state what product you are offering. Include technical specifications such as the model number, drawing number, dimensions, and colour, and add quality indications for each item, so the customer can be sure that they are purchasing the right product. Describing the product in as much detail as possible will help prevent misunderstandings later on and reduce the chance that the customer is dissatisfied with the colour, price, or specifications of the product. In the end, it may save you a return. 

4. Quantity 

Mention how many products you are offering. Indicate the quantity in units, litres or some other measure. 

5. Additional documents needed 

Applying for and sending required documents also costs money. These costs increase your price and are part of the process of working out your cost price when exporting goods. As such, you have to include them in your quotation. Within the EU, an invoice, packing slip, and transportation document are usually enough. If you do business outside the EU, you will usually need additional documents. 

6. HS code 

If you are sending or receiving goods to or from a non-EU country, you need a commodity or HS code. The commodity code of a product determines the import duty rate in the importing country and what documents you need to import and export the product. You can find the right code in Access2Markets. 

7. Country of origin 

When you do business with non-EU countries, you can state the country of origin in the quotation. This is the country where your product was produced. This lets your customer investigate whether any special political measures, such as sanctions, apply to products from the country of origin. If the EU has a trade agreement with the customer’s country, they will usually qualify for a lower duty rate, if they have to pay import duty at all. This only applies to EU products of preferential origin, which means they were made in the EU and meet the rules for EU preferential origin. You demonstrate this with a EUR.1 document or an invoice declaration. 

If you are an importer, you usually pay less or no import duty for products of preferential origin from a treaty country, provided you have a document or certificate of preferential origin. 

8. Price and currency 

Clearly indicate the product price and currency in your quotation. If your price is in a currency other than the euro, currency fluctuations affect your product prices. Decide in advance how long you want to run foreign exchange risk and put a validity period on your quotation. With a free-term quotation, the supplier can adjust prices at its discretion. 

9. Packaging 

Indicate how you package goods. Good packaging must meet multiple packaging requirements to prevent damage. Regulations may also apply to the use of packaging materials and symbols on packaging. In many countries, wooden packaging such as pallets, crates and dunnage, for example, are subject to ISPM15, an international standard aimed at preventing the spread of live pests during transport. 

If the packaging offered does not match the requirements of your customer or the destination country, you can take action before any harm is done and offer a different form of packaging. The Netherlands Enterprise Agency has a special page on product and packaging requirements in other countries (in Dutch). 

10. Mode of transportation 

Goods can be transported by road, rail, water, or air. Each mode of transport has its own pros and cons when it comes to speed, flexibility, and costs. Specify how you will arrange transportation for your customer or make your needs and wishes known to your supplier. 

11. Incoterms® 

Incoterms® are standardised international transportation agreements. Agreeing on an Incoterms® rule creates clarity as to who is responsible for arranging transportation and who bears the risk of damage in transit at any given time. Mention the Incoterms® rule as a Term of Delivery and clearly state which version you are using. The latest edition of the Incoterms® was published in 2020. 

12. Delivery time 

Your customer will want to know when they can expect to receive the products, so state your delivery time in the quotation. When your quotation becomes an order, you can confirm the delivery time. 

13. Form of payment 

Indicate how and when you want to be paid for the goods. Payment can be made in several ways, for example via a Letter of Credit (L/C) or prepayment. The form of payment is often not a hard requirement and there is usually room for negotiation. 

14. Warranty 

If you sell products to other companies, there are warranty rules to consider, for instance if the product is defective upon delivery or breaks within a certain period. You can include the warranty period and terms in your quotation or refer to the warranty rules in your general terms and conditions. 

15. General terms and conditions 

Your general terms and conditions contain your rules about payment, delivery times, and warranty, among other things. General terms and conditions are not mandatory, but they can help you avoid a lot hassle: if an issue comes up, you can always refer to your T&Cs. If you have filed your general terms and conditions with KVK, you can refer to them in your quotation, but you can also choose to attach a copy. Evofenedex (in Dutch) offers extensive information on using general terms and conditions. If you are doing business with an international partner, have a lawyer draw up or check your general terms and conditions. 

Sample quotation 

Looking for a sample quotation? Download this international quotation (in Dutch). We also have a sample order confirmation (in Dutch).