Why Quotations Differ 40% on the Same Part

Quick answer

Material grade substitution accounts for 8–20% of the gap on metal and plastic parts.
Cycle time assumptions of 45 versus 70 seconds per part change labour cost by a third.
Tooling amortised over 5,000 units versus 50,000 units moves unit price by 10–25%.
EXW versus FOB can add 4–9% once inland haulage and export clearance are counted.

Four lines: material, cycle time, tooling, freight

A quotation is not a price. It is a set of assumptions compressed into one number, and two factories rarely make the same assumptions.

The four that matter most are material grade, cycle time, tooling amortisation and freight basis. Three of them are arithmetic, not negotiation.

Line	Typical gap	What to ask for
Material grade	8–20%	Grade name plus mill certificate, not just “steel”
Cycle time	20–35%	Quoted seconds per part and cavitation for moulded parts
Tooling amortisation	10–25%	Tool cost, and the unit volume it was spread over
Freight basis	4–9%	EXW, FOB or DDP, and who pays inland haulage

Hands comparing printed quotations and a calculator on a desk — Pexels · free to use

How to normalise two quotes before you compare

Buyers often ask why quotations differ by so much when the drawing has not changed. The answer is almost always in the assumptions, not in the margin.

Put both quotes into one table with the same rows, then delete every line that is not comparable. What survives is the real difference.

Ask each factory to re-quote at the same volume. A quote for 5,000 units and a quote for 50,000 units are not competing numbers.

If a factory will not break down material and labour separately, treat the quote as an estimate, not an offer.

Same specification sheet sent to both, same revision number, same tolerance callouts.
Same order quantity, stated in writing before quoting.
Same Incoterm, or convert both to FOB yourself before comparing.
Same payment terms — a 30% deposit and a 100% prepayment are different prices.

Cartons stacked on pallets waiting for collection in a warehouse — Pexels · free to use

Why packaging and freight differ so much

Carton cost per unit is usually small. What moves the number is how the factory loads a container and whether it quotes export packing at all.

A factory quoting EXW leaves the inland leg to you. On a 20-foot container from Dongguan to Shenzhen port, that leg plus export clearance commonly runs 4–9% of goods value.

Skyscraper in urban cityscape with glass reflections on a sunny day. — Pexels · free to use

What we do when two quotes disagree

We take both quotes to the same specification, re-quote at one volume, and report the four lines side by side with the mill certificate and the audit notes attached.

We do not tell you which factory is cheaper. We tell you what each price assumes, and which assumptions you can verify before money moves.

Common questions

Is the cheaper quote usually the riskier one?

Not automatically. A 40% gap often sits in tooling amortisation, which is arithmetic. But when the gap comes from material grade with no certificate offered, treat it as a finding.

Should I ask both factories to re-quote at the same volume?

Yes, in writing. Volume changes material purchasing and tooling spread, and both change the unit price by more than most buyers expect.

The factory refuses to break down costs. Is that a red flag?

It limits what you can verify. You can still compare landed cost at one volume, but you lose the ability to tell a pricing difference from a specification difference.

We do not set prices, do not negotiate on your behalf without instruction, and do not take commission from factories. Our work is to make two quotes comparable and to verify the assumptions behind them.