Knowing how to make offers in business transactions is a big part of getting what you want out of the deal.
WHAT IS AN OFFER?
An offer is an expression of willingness to get into a contract on definite terms if those terms are accepted.
This is important because by accepting the other party’s offer you are ensuring that the procurement stages can proceed without a hitch
Offers can be classified as counter offer, conditional offer, cross offer, single and standing. Here is a quick look into all of those.
You need to understand that “Offer and acceptance” are the focus of a contract
- The seller can make an offer to sell which is accepted by the buyer to establish an agreement or
- The buyer can make an offer to buy, which the seller accepts in order to establish the agreement
HOW TO MAKE OFFERS IN PROCUREMENT
How to make offers when dealing with procurement is a question whose answer you should always have at your fingertips.
Takes something like a tender. There are a number of advantages in tendering but you can only achieve these if your bid makes sense to the person who did put out the invitation to tender which is an example of invitation for you to make an offer.
Whether dealing with tenders or just regular business needs a good place to start is by being clear on the key requirements for a valid and workable commercial agreement.
This means having a clear statement and accurate alignment of;
- Exactly what the buy wants
- What the supplier is offering, or agrees to supply
HOW DO YOU DEFINE AND COMMUNICATE THE REQUIREMENTS?
Assuming you are the buying organization, you will seek to establish a detailed description of your requirements which can be communicated to potential suppliers. This will mean taking into account the 5 rights of procurement, basically ensuring that the goods you are interested in are to be supplied at the right price, in the right quality and quantity and delivered to the right place at the right time
All those are to be part of your offer.
Offers are easy if you are dealing with a re-buy, for example, a situation where detailed description already exist, but for a new modified procurement, they may have to be drawn up, in the form of;
- Specification (of various types)
- Service levels agreements (added to specifications)
- Contract terms
In this case Key performance indicators, or performance measures will be used to establish whether the requirements have been satisfactorily met
CONCLUSION
When faced with the how to make offers in procurement question, you need to have a clear statement of what the buyer wants or know exactly what the supplier is willing to offer.
Remember offer are suppose to be accepted so that they can lead to a contract hence the need for you to understand all the details that are being presented otherwise you will be bound by terms you are not even aware of but you accepted.
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