Compare stone quotations on the same basis

The problem

A price per square metre answers only one question. It does not tell you which area was measured, where the price stops, what packing and documents are included, how long the offer stands or when you must pay.

Suppliers are not being careless when quotations differ. They quote on the terms they normally use. The buyer's job is to translate each quotation into the same terms before deciding which is lower.

Record every quotation on one sheet

Ask each supplier to answer the same lines in writing. Where a line is not answered, write "not stated" rather than assuming.

1. Material identity: trade name, petrographic name (the stone's geological classification), source area, and the block or lot references the price applies to. A price for "the same name" from two suppliers may not be for the same stone.

2. Product: thickness, finish, and whether you are buying slabs, cut-to-size pieces or tiles, with the quantity.

3. Price unit and area basis: per square metre of gross slab area, per square metre of net usable area, or per finished piece. Ask how the area is measured and request a slab-by-slab measurement sheet before payment.

4. Selection: what the price buys. Ask which selection or grade is offered, how it is described, and which photographs or samples represent it.

5. Tolerances and treatment: the thickness tolerance, permitted repairs, resin or backing, and whether any treatment is included in the price.

6. Packing: crates or bundles, whether packing is included, and whether a packing list will identify each slab.

7. Delivery term: the trade term, the named place and the edition, for example "FOB [named port of loading], Incoterms 2020". The named place matters as much as the three letters.

8. Documents: commercial invoice, packing list, measurement sheet, and any certificates or test reports you need. Ask which are included and which cost extra.

9. Inspection: whether pre-shipment inspection is possible, who performs it, when and at whose cost.

10. Payment, currency and validity: the currency, payment terms and stages, the date the offer expires, and the time from order to dispatch.

11. Exclusions and shortfalls: what is not included, and what happens if slabs are broken, short or outside the agreed range.

Delivery terms in plain language

International quotations commonly use a trade term from the International Chamber of Commerce's Incoterms rules. Each rule sets out where the seller delivers, which costs each side pays up to that point, and where the risk of loss or damage passes from seller to buyer.

FOB (Free On Board, named port of shipment): the seller delivers the goods on board the vessel at the port of loading. Ocean freight and insurance after that point are for the buyer to arrange and pay.

CIF (Cost, Insurance and Freight, named port of destination): the seller pays freight and minimum insurance to the destination port, but the risk passes to the buyer once the goods are on board at the port of loading. Under the 2020 rules, the seller's minimum insurance under CIF is the limited cover of Institute Cargo Clauses (C), unless the parties agree a higher level. Ask what cover is included and decide whether you need more.

FOB and CIF are for sea and inland waterway transport. Where stone is shipped in containers, note that ICC guidance says that for containerised goods, which are usually handed over at a container terminal rather than on board, FCA (Free Carrier) is often the more appropriate rule, with CPT or CIP as the counterparts to CIF. Discuss the choice with your freight forwarder.

Incoterms rules do not settle everything. ICC states that they do not deal with the price or method of payment, the transfer of ownership of the goods, or the consequences of breach of contract. Those belong in the contract of sale.

Bring the quotations to one basis

1. Choose the comparison point. Usually the destination port, before import duties and local delivery, is practical. Every quotation is then brought to that point.

2. Choose the area basis. Compare the cost per square metre of usable stone, because that is what you install. Where a quotation prices gross area, use the supplier's measurement sheet for the offered slabs to find the usable share. Do not apply an assumed allowance.

3. Add the missing costs. For a quotation that stops at the port of loading, ask your freight forwarder for ocean freight to your destination port and your insurer or forwarder for cargo insurance, using the same shipment details for every supplier.

4. Add or note what is excluded. Packing, documents, inspection and treatment either go into the figure or into a written list of differences.

5. Compare the totals and the differences together. A lower total with "not stated" against tolerances, selection or inspection is not yet a lower price for the same thing.

Worked example (illustrative)

The suppliers, prices, freight and insurance figures in this example are invented to show the method. They are not market rates.

A buyer needs 400 m² of usable 20 mm polished granite, delivered to their destination port. Two quotations arrive.

Supplier A: USD 38.00 per m², gross slab area, FOB the port of loading in India, crates included.

Supplier B: USD 46.00 per m², net usable area, CIF the buyer's destination port, crates included.

At first sight A looks USD 8.00 per m² cheaper, about 17 % below B.

Step 1, area basis. Supplier A's measurement sheet for the offered slabs shows that usable area is 90 % of gross area for this lot. To obtain 400 m² usable, the buyer needs 400 ÷ 0.90 = 444.44 m² gross. Supplier A's goods price is 444.44 × 38.00 = USD 16,888.89.

Step 2, delivery point. Supplier A's price stops at the Indian port. The buyer's forwarder quotes ocean freight for the two containers needed at USD 1,900 each, USD 3,800 in total, and cargo insurance at USD 150. Supplier A's total to the destination port is 16,888.89 + 3,800 + 150 = USD 20,838.89.

Step 3, Supplier B. 400 m² usable × 46.00 = USD 18,400.00, already to the destination port and including insurance at the CIF minimum.

Result: Supplier A costs 20,838.89 ÷ 400 = USD 52.10 per usable m² at the destination port. Supplier B costs USD 46.00. On the same basis A is USD 6.10 per usable m² more expensive, about 13 % above B, USD 2,438.89 in total.

The buyer still has questions before deciding. Is B's insurance cover enough, or should higher cover be bought? Do both suppliers state the same thickness tolerance and selection? Is B's net area measured the same way as the buyer's cutting plan? Costs after arrival at the destination port, such as port charges, duties and local delivery, are not included and must be checked separately for each quotation.

The point is not that CIF is cheaper or that a net price is better. It is that the two headline prices answered different questions.

What the comparison cannot tell you

It cannot tell you whether the stone is suitable for the application, whether the supplier will deliver as quoted, or whether the lot matches the samples. It does not include duties or import requirements at your destination; ask a customs broker. And a comparison is only as good as the supplier's measurement sheet and the freight and insurance quotations behind it.