What is a revised price quotation letter?
A revised price quotation letter is a letter that is written and sent by an organization that has quoted a price for an order and is now revising it. It is addressed to the client organization which is interested in purchasing the product or service. In this letter, the organization informs the client about the revised price and provides proper reasoning behind the change. In addition, the share of the burden, especially in the case of an increased price, should be clearly stated as well.
Possible scenarios to write the letter?
This letter can be written in various scenarios, such as:
- The initial quoted price was lower than what is profitable to the company because:
- The cost calculation was inaccurately done by the staff members.
- A wrong price quotation document was sent.
- The government has increased the duties, taxes, etc., on the ordered items, etc.
- The quoted price needs to be decreased because:
- The cost of raw materials, labor, or other resources has decreased.
- The market or competitors’ price has decreased.
- The government has subsidized the product, or its production, etc.
When the price is increased in the revised quote, the organization has to decide about the bearer of the additional cost. Sometimes, the organizations use this letter to inform about the increased price and bear the maximum burden itself, at least for the current contract. If the organization cannot, or does not, want to bear the burden itself, it would clearly inform the client about the price hike, so as to avoid any future ambiguities.
Details to add?
When this letter is written, the content is adjusted according to the effects on the client. However, generally, the following details are included in such letters:
- Details of the client organization.
- Details of the addresser organization.
- The reference of the contract, deal, or order.
- The quoted price.
- Revision in the quoted price.
- Reason and justification behind the increase.
- Share of the burden in the case of increased price, and or discount given in the case of decreased price.
- Show hope of understanding and cooperation.
After receiving this letter, if the revised price is higher than the previously quoted price, the client may cancel the deal, if the contract allows so. However, if the increased revised price is still below the market price, and/or is in the client’s budget, he might accept the organization’s request, and continue with the deal. In addition, if the revised price is lower than the initially quoted price, the client would become happy, and his loyalty toward the organization would increase.
Dear Ms. Sarah,
I am writing this letter to send you a revised price quotation for the product that you ordered on 4th November 20XX.
We, at ABC Limited, have a philosophy of attracting customers by giving the most reasonable price in the market. We gave you a price quotation, which you found suitable, and accepted it. However, the prices were quoted based on the government policies at that particular time.
As the items that you ordered have to be imported from XYZ country, the government policies and excise duties directly impact the prices. After our deal got finalized, and we started the import process, the government increased the import duties on that [X] product by 15%, which has increased the price to $[X] per product.
We cannot completely bear the increased cost. However, as we had signed the deal before this increase, we are not expecting you to bear the complete burden as well. After doing all the cost calculations, the revised price is $X per product, which is still lower than the market price.
We hope you understand our problem and cooperate with us. Thank you.
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