How a Kitchen Knife OEM Quotation Should Be Structured

📅 Aug 21, 2026 👁 views

An OEM knife quotation that arrives as a single number is not a quotation, it is a starting position. A useful quotation has enough structure that the buyer can compare it against another factory, test the assumptions, and check it against the landed cost model.

This article sets out what a proper cutlery OEM quotation should contain, and the ten questions that expose a thin one.

What a complete quotation contains

Section	Required content	Why it matters
Validity	Date of issue, expiry date	Steel prices move; an expired quote is not a price
Reference	Specification sheet and drawing version quoted	Prevents quoting an old design
Description per SKU	Product name, material, key dimensions, finish, weight	Comparability between suppliers
Unit price by quantity band	Price at each MOQ tier	Shows the volume sensitivity and where the cost steps are
Currency and basis	Currency, Incoterm, named port or place	FOB, CIF and DDP are not comparable numbers
One-off costs	Tooling, plates, dies, fixture, itemised	Should not be hidden in the unit price
Sampling	Sample fee, whether credited, number of rounds included	Often a genuine cost that is omitted
MOQ	Per SKU and per colour or material variant	Total order MOQ can hide per-SKU MOQ
Lead time	Sample lead time, production lead time from PO and deposit	Two separate numbers, often conflated
Payment terms	Deposit percentage, balance trigger, accepted instruments	Affects working capital and risk
Packaging	Included pack type, pack cost, carton count, carton dimensions and weights	Required for freight calculation
Inspection	AQL level, who inspects, who pays for third-party inspection	Quality risk allocation
Testing	Which reports are included and which cost extra	Can be a significant hidden cost
Warranty	Defect definition, period, remedy	The basis of every later claim
Exclusions	What is explicitly not included	The most informative line in the document

Reading price bands

A quotation with one price is less useful than one with bands. Bands reveal the cost structure:

Quantity band	Quoted unit price	Implied step	What the step tells you
500	18.60	—	Below efficient batch size, high setup per unit
1,000	15.40	−17%	Large step: setup and tooling amortisation dominate
3,000	13.10	−15%	Still a material step: batch setup and material buying
5,000	12.40	−5%	Small step: approaching the variable cost floor
10,000	11.95	−4%	Near-flat: from here the price is materials and labour

Three diagnostics follow. First, if the price does not fall with volume, the factory is either quoting a protective price or the cost is genuinely dominated by materials. Ask which. Second, the point where the curve flattens is the efficient order size. Third, a very large first step suggests a lot of setup is being loaded into small orders — which is exactly what the amortisation discussion is about. See tooling amortisation.

Comparing quotations from different factories

Two quotations are only comparable if four things are identical: the specification, the Incoterm, the packaging and the payment terms. A comparison table:

Line	Factory A	Factory B	Factory C	Note
Steel grade	As specified	Substituted, lower grade	As specified	B is not comparable
Hardness	56–58 HRC	54–56 HRC	Not stated	B is cheaper material; C is unspecified
Handle construction	Full tang, riveted	Moulded over tang	Full tang	B is a structurally different product
Incoterm	FOB Shanghai	CIF Hamburg	FOB Ningbo	A and C comparable; B includes freight
Packaging	Printed carton included	White carton, print extra	Printed carton included	B understates by the pack cost
One-off costs	Itemised, 7,100	Not stated	Included in unit price	C's unit price is not comparable
Lead time	35 days from deposit	45 days from deposit	30 days from deposit	Convert to weeks and add shipping
Payment	30/70 against copy documents	50/50 before shipment	100% against B/L	Working capital and risk differ materially
Testing included	None	One LFGB report	None	Add a common testing assumption

Once normalised, quotations frequently reverse order. The apparently cheapest is often the one with the loosest specification. The discipline is to normalise before comparing, and to write the normalisation assumptions down so the comparison can be defended.

The normalised landed cost per SKU is the number that matters:

Line	Amount	Source
Unit price at the intended quantity	a	Quotation band
Packaging, if not included	b	Quotation or packaging supplier
One-off costs divided by the quantity	c	Quotation, divided by the chosen volume
Freight per unit	d	From carton dimensions and weight, not from weight alone
Insurance per unit	e	Percentage of FOB value
Duty per unit	f	Tariff rate applied to the customs value
Destination handling per unit	g	Fixed fees divided by units per shipment
Inspection and testing per unit	h	Total divided by units tested or shipped
Landed cost	a+b+c+d+e+f+g+h

Compare the landed cost to the target, not the unit price to the target. A 0.80 unit cost difference multiplied by volume, plus a different Incoterm, can reverse a decision. The CIF building rule matters here: freight and insurance are not passed through at cost but marked up. See steel price volatility for why a validity date is not a formality.

Ten questions that expose a thin quotation

Which specification version and drawing version is this quoted against?
What is the steel grade from, and can you provide the mill certificate?
What hardness range will you hold, and how do you test it?
What is the packaging cost per unit and what carton count and dimensions apply?
What are the itemised one-off costs, and which of them are reusable on future orders?
What is the price at double and at half the quoted quantity?
What is included in the Incoterm and what is excluded?
What is the sample lead time and the production lead time, stated separately?
Which test reports exist already for this material combination, and which would need to be commissioned?
What is explicitly excluded from this price?

Question ten is the one that produces the most useful answer. A factory that answers it precisely is a factory that has quoted carefully. A factory that answers "nothing, it's complete" has not thought about it, or is not being straight.

Common quotation traps

Trap	What it looks like	How to counter
Silent specification downgrade	A cheap price with a vaguer description	Require the spec version on the quotation
Hidden tooling in the unit price	No one-off line, unit price above market	Require itemised one-offs
Incoterm confusion	CIF quoted in a comparison against FOB	Normalise every quote to one Incoterm
Currency without a basis	USD price with no exchange assumption	Ask for the currency basis and a validity period
Weight-only freight	Freight estimated from kilograms	Compute volumetric weight from carton data
Optimistic lead time	A number with no starting point	Convert to calendar dates from the PO and deposit date
Missing pack cost	Packaging "per the buyer's artwork" with no price	Request the pack cost as a named line
Excluded testing	Compliance not mentioned	Add a common testing line to every comparison

A quotation request template

Send the request with the specification sheet attached and the following fields, so responses are comparable:

Specification and drawing version reference.
Requested quantity bands, for example 1,000 / 3,000 / 5,000.
Requested Incoterm and named place.
Packaging requirement, including whether print is included.
Testing requirement by market.
Delivery window required.
Request for itemised one-off costs.
Request for the exclusions list.

A factory that receives this will usually respond with a better document, because the request itself sets the standard. See reading a quotation for the Incoterm arithmetic, and quotation traps for the negotiation stage.