How to put factory quotations on one commercial basis — the step that decides whether a comparison means anything at all. In construction procurement the same discipline is called bid leveling.
Normalisation is not adjustment for its own sake. It is the answer to one question: what would each factory's offer cost if every offer answered exactly the same commercial question?
Choose the basis first and write it down: which Incoterm and named place, which quantity tier, packaging to which specification, tooling treated how, payment on which terms, prices in which currency. Every quotation is then restated on that basis — and every restatement is recorded, so the comparison can be audited later. A normalisation nobody can retrace is an opinion with a spreadsheet.
Convert at one dated rate and note each quote's validity window. A price valid for 15 days and a price valid for 90 are different commercial commitments even when the numbers match.
Move every price to the same tier — the one you actually buy at. Where a factory quoted only a lower MOQ, its price carries a small-batch premium that must be made explicit rather than read as expensiveness.
Bring all quotes to one delivery basis. An EXW price omits inland haulage, export clearance and loading that an FOB price includes; the gap is real money and varies by origin. The FOB vs EXW guide works a full example.
Where packaging is excluded or undefined, assign it a realistic cost against your specification — cartons, inner protection, labelling — and state the assumption. Undefined packaging is the most common hidden line in furniture quotations.
Separate tooling from unit rates everywhere. A quote with tooling amortised inside the rate looks expensive against one that bills it separately — and cheap against one that omitted it. State tooling as its own line with ownership attached, then compare unit prices clean.
Deposit size and balance triggers shift financing cost and risk. Where terms differ materially, either restate them to one structure or carry the difference as a visible note against the offer — never let it disappear.
| Adjustment | Factory A | Factory B |
|---|---|---|
| As quoted | €149.00 · EXW | €162.00 · FOB |
| Origin costs to FOB | +€6.00 | — |
| Packaging to spec | +€3.00 | included |
| On one basis (FOB, packed) | €158.00 | €162.00 |
Illustrative figures. The €13 “saving” was €4 — still real, but a quarter of the size the raw quotes implied. Decisions change at that scale.
Normalisation aligns commercial terms; it cannot repair a specification gap. If two factories priced different constructions or materials, the fix is a corrected quotation against the spec, not an adjustment factor. That is why a controlled RFQ — one specification priced by everyone — matters more than any after-the-fact arithmetic, and why an independent comparison starts there.