How to compare supplier quotations: a 7-point checklist for Indian businesses

Most small businesses compare quotes the quick way: line up the rate per piece and pick the lowest. It feels sensible, and it is often wrong. Quotes arrive as a PDF from one supplier, a WhatsApp message from another and an Excel rate list from a third. Each one hides its costs in a different place.

Here is the checklist we use, with a real-looking example: a brand that needs 5,000 shipping boxes and has three quotes.

On rate alone, C looks cheapest and B looks most expensive. Work through the checklist and the order flips.

1. Check it is the same item

A 5-ply box is not a cheaper 3-ply box. Before comparing prices, match the specification line by line: size, material, grade, GSM, finish, printing. If one quote is for something different, either ask for a revised quote or note the difference next to the price.

2. Put every price on the same unit

Rates come per piece, per 100, per dozen, per kg or per sheet. Convert them all to the unit you will actually order in. A rate of "₹1,800 per 100" is ₹18 per piece. Check that nobody has quoted a smaller pack or a lighter weight to make the rate look lower.

3. Find out whether GST is included or extra

"All inclusive" and "+ GST" prices cannot be compared directly. If you are GST-registered and the supplier gives you a proper tax invoice, the GST is usually money you claim back, so the price that matters is the price before GST. Our guide on GST inclusive vs exclusive prices walks through this with numbers.

4. Check the supplier's GSTIN and your own credit

GST is only a pass-through cost when you can actually claim it. That needs a registered supplier, a valid tax invoice, and the invoice showing up in your GSTR-2B. A supplier without a GSTIN, or one on the composition scheme, cannot give you input tax credit, so every rupee you pay is cost. See input tax credit on purchases for the full conditions.

5. Add freight and other charges

Delivery, loading, packing and printing plates all land on the same bill. A quote that is silent on freight is not a quote with free freight: ask. Terms like "ex-works" and "FOR destination" change who pays for transport. Our guide to freight terms in quotations explains each one.

6. Apply the minimum order and pack size

If you need 5,000 and the minimum is 10,000, you pay for 10,000. If boxes come in bundles of 25, you round up to the next bundle. Work out what you will really have to buy, then divide the total by the quantity you need. That is the real rate. More on this in MOQ and the real price.

7. Check validity and delivery time

A cheap quote that expired last week, or that arrives after your launch date, is not an option. Note the validity date and the promised lead time against the date you need the goods.

The example, worked through

B, the quote that looked most expensive, is the cheapest by ₹13,372.88. Its ₹19.50 already includes GST you can claim back and delivery. C, the one that looked cheapest, costs more than double, because the minimum order forces you to buy 5,000 boxes you don't need.