This was originally posted in 2012 under expertexporter’s WordPress blog.
All of my roles in international business have required me to respond to tenders, so it’s something that I now feel very comfortable with regardless of whether the tender is worth a few thousand pounds or millions of dollars. However, not everyone has had the opportunity to be exposed to international tendering, so here are some things you should be aware of.
The first thing to do when you receive a tender is to check and note the closing date. If the tender is to be delivered by courier, count back the number of days required for a courier delivery and then add on a few days buffer. The date you have arrived at is the date the tender must be ready for collection by the courier company. This is your absolute deadline and it may mean working longer hours to meet it!
Submitting a tender always takes longer than you think, so start work on it immediately. Check the specification to see which products are required. You might be fortunate and find that the specification that the buyer has used matches your products very closely. However, if the tender specifies your competitor’s product, be prepared to spend time comparing products and identifying the best match from your range. To avoid problems further down the line, it’s important to make sure the buyer is fully aware of any differences between the product specified in the tender and the one you are offering, so include this in your tender submission.
If the products in the tender are standard manufacture, it is likely you will already know the cost and the lead time. If the product is not standard, contact manufacturing and finance as soon as possible to get the information required.
Read through the terms and conditions noting tender validity, delivery and payment terms and highlighting any that require further action or a response. Buyers will often require product samples to be submitted, so start to organise these now, noting any special labelling and numbering requirements. Samples can often be despatched in advance of the documents unless otherwise stated in the tender. Look out also for requirements such as tender guarantees. These can be arranged through your local bank and are generally required for 5% of the tender value. If you withdraw your tender before the closing date or fail to set up a Performance bond in respect of the order, you will be required to forfeit your tender guarantee.
A key aspect of international tendering is to calculate a price that will allow you to submit a competitive price whilst still generating a profit margin. This is becoming more challenging as many competitors are based in lower cost countries and can beat UK prices whilst maintaining quality. If you are pricing in a currency other than Sterling, check the exchange rates and be sure to factor in potential changes to the rate. There are tools available for managing currency risk, however, these are generally the preserve of major trading companies.
Once the ground work has been completed, it is time to start to pull your bid together. Many sellers will have a standard template for submitting bids and it is quite acceptable to use this if the buyer has not provided guidelines for submission. However, many buyers require bids to be submitted on their template as it makes for easier comparison of tenders. If the buyer provides a template, it is best to adhere to this unless you want your tender to be discarded at the first hurdle. Submitting a tender in the buyer’s format may well challenge your creativity as you try to make sure that your responses and comments re the tender conditions are included. If there is important information that you wish to submit that does not fit the format, include it and make reference to it on the buyer’s template.
Always keep a copy of all documentation submitted and make sure that if the tender goes by courier, it is tracked until it is received and signed for. In the unlikely event that your courier package goes astray, you might have time to resend the documents and this is so much easier if you have a full record of the submitted documents. It will also help, when you come to do this tender the next time round, if you have something to refer to.
Don’t just forget about the tender once you have submitted it. Make a note in your diary to review it just after the closing date. If you have a local agent, get them to make discreet enquiries. If you hear nothing from the buyer, send them an e-mail asking if they have had time to consider the tender. Keep following up in a friendly manner until you manage to get some feedback about the outcome of the tender. If you are successful in winning the tender, make sure that you do all you can to fulfil the order as per the tender terms to enhance your standing with the buyer. If you are unsuccessful, try to get some feedback from the buyer and take these points on board when you next submit a tender. It will be easier second time around!