The problem isn’t the price. It’s how you build it

Training

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 brings together many variables, all linked to one another. On one side the raw material: type, colourant, end use, minimum batches, inserts and offcuts. On the other the processing: mould cleaning, set-up, type of press, automatic or manual production, rejects, oven cycles, packing and packaging. On top of that comes the depreciation of the mould, which can be charged directly to the product.

It is the model we built for a company that makes moulds and technical plastic components for the medical and automotive sectors: twelve months of work to reorganise it and see it through the generational handover, after which the owner asked us to stay. Today we are their fractional manager, and we keep that model continuously up to date. The full story is in our fractional management case.

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?