EXPLANATION: PRICE LIST
Price list is a document used to offer commodities for sale. In this document, colors, styles, patterns, materials, sizes and many other qualifications about the commodities are described. Additionally, prices, quantities, payment terms, shipping conditions and date validity of the offered prices are also included. All these terms and conditions should be described according to the regulations of business transactions and trading. The purpose of this document is to provide the potential clients with relevant information. They need this information to judge their profit margins hence to decide whether or not to place the order. Price list sometimes is termed proforma invoice. Both the seller and buyer will sign a contract afterwards to confirm purchasing and delivery of the goods after the proposed terms are agreed and accepted.
Three common types of quoted prices in international trade are: FOB, CIF and C&F prices. Normally, price estimation includes production cost such as materials, wages, electricity, etc., transportation, and security. Transportation covers fares like shipment by truck, train, airplane, and/or ship. Normally, forwarders like UPS, Evergreen cargo and other brokers are involved in this business. Certainly, they charge their services for handling the goods from one place to another. The fees they collect is known as "Freight". Security is the cost spent to protect the goods arriving in the destination in safe condition. Naturally, an insurance company is in charge of this business. The fees they collect is known "Insurance".
FOB is the price which includes the basic cost of manufacturing the products as well as inland transport when the goods is delivered from factory to harbor. FOB price does not cover the cost after the goods leaves the departing sea or air port. Therefore in a price list, the seller must indicate the departing port if the offered price is FOB based price. For instance, if the goods departs from Keelung, Taiwan, the FOB price must be printed FOB Keelung.
CIF is the price which includes FOB price, freight charged from the departing to the destination port as well as the relevant insurance fees. Therefore, in a price list, the seller must indicate the destination port if the offered price is CIF based price. For instance, if the goods departs from Keelung, Taiwan, but arrives in Chicago, United States, the CIF price must be printed CIF Chicago, not CIF Keelung. The same indication occurs to C&F price which includes FOB price and freight charge from Keelung to Chicago sea port. In this case, the price list must indicate C&F Chicago.
A simple example explains to you the three different prices. For the same product, say, 100 dozens radio sets, the FOB price is quoted at US$140000; however, at C&F price, it is US$147000; and at CIF price, US$156000.
However, if a transaction goes through simple procedures such as subscribing to a magazine or ordering a merchandise through retailer's mailing catalogue, price list and order including payment and delivery are printed together in a form. This form is handy for both supplier and customer. It is frequently used by publishers or other service sectors.
