The problem isn’t the price. It’s how you build it
Theory and practice
Many companies are convinced they have a sales problem. “The market doesn't pay.” “Customers haggle over price.” “The competition is aggressive.”
Then you take a closer look… and one fundamental thing is missing: a proper quotation model.
Selling at the right price isn’t luck. It’s method. Without a structured model, the price becomes an estimate. And every quotation is a gamble.
The result? Uncertain margins, negotiations driven downwards and profits that evaporate. And yet the variables to consider are there for all to see.
Let’s take three real cases.
In plastic moulding, every job order consists of:
- raw material (type, colourants, offcuts);
- processing (set-up, press, automation);
- rejects, oven, packaging;
- mould depreciation.
If you do not have a model that holds all of this together, the price is not correct but random.
In flour mills, change the “recipe” and everything changes:
- grain mix;
- saleable by-products (bran, middlings);
- packaging;
- transport.
Every variable affects the margin, and ignoring it means losing it.
And then there are trading companies, such as those in the oil sector. Here everything seems simple: I buy and I resell but, in reality, it is logistics that makes the difference:
- quantities transported;
- distances travelled.
It takes very little to turn a sale into a loss.
The point is this: without a quotation model, you are not setting the price, you are having it imposed on you.
A good model, on the other hand, allows you to:
- know all the costs;
- apply the right margin;
- make informed decisions;
- avoid surprises at the end of the month.
And above all, it puts you in a different position in the negotiation, because you are not defending the price, you are standing behind it.
A well-built quotation model also makes it possible to compare different products, customers and job orders objectively, helping the company understand where margins and efficiency are really generated. When the data is clear, sales decisions become simpler too, because you are no longer reasoning only about sales volume but about the economic quality of the work won. This approach also makes it quicker to spot any production inefficiencies, errors of judgement or underestimated costs which, over time, can undermine the overall profitability of the business. A quotation built with method doesn’t just help you sell; it also protects the company’s economic balance, financial sustainability and capacity for growth.
When a price is built without a precise method, even a good sale can turn into a margin problem. Knowing your costs in detail means negotiating with greater confidence and protecting the real value of your work.
The real question is: are you preparing quotations… or are you building profitability?