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Question
What are the different types of price quotations?
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Solution
The quotation reflects the price at which the seller is ready to supply the goods and the terms and conditions of sale. Price may be quoted in several ways depending upon the relative responsibilities of the buyer and the seller. Some of the popular types of price quotations are as follows:
1. Loco Price : Is the 'ex-factory' price, it includes the cost of production plus profit margin.
2. F.O.R. (Free on Rail) : Under this, the seller bears the cost of transporting the goods to the railway station and the expenses of placing them on the wagon.
3. F.A.S. (Free Alongside Ship) : This price includes all expenses incurred on transportation of goods from the seller's warehouse to the port. Buyer has to get the goods loaded on the ship at his own expenses.
4. F.O.B. (Free on Board) : The quotation includes F.A.S. price and the cost of loading the goods on the ship at the port of exit.
5. C & F (Cost and Freight) : Cost and Freight covers the price of goods, packing charges, cost of sending the goods to the port, dock dues, loading charges, export duty and freight payable to the shipping company for carrying the goods to the port of destination.
6. C.I.F. (Cost, Insurance & Freight) : This clause in a contract implies that the seller will bear not only the cost and freight but also the charges for insuring the goods against the perils of the sea i.e. marine insurance policy. The exporter pays the premium and secures an appropriate insurance policy.
7. C.I.F.I. (Cost Insurance Freight and Interest) : This quotation consists of, besides cost, insurance and freight.
The interest payable on the capital invested in the goods. When goods are purchased through a commission agent and agent's commission too is included in the price, the quotation is known as & C.I.F.I. & C. If risk of exchange fluctuation is also covered, it is quoted as C.I.F & E.
8. Franco : Also known as free price, this quotation includes all charges for delivery of goods to the buyer's warehouse. It implies the free delivery of goods.
9. Ex-Ship : Such a price implies that the seller will bear all expenses until the ship carrying the goods arrives at the port of discharge.
10. In Bond Price : This price includes all those expenses incurred till the goods are carried to the bonded warehouse at the named port. Charges for the withdrawal of goods from the bonded warehouse have to be borne by the buyer.
11. Landed Price : It indicates that all expenses upto the goods discharged on land at the port of destination are met by the exporter.
12. Duty Paid Price : This price includes all those expenses which are incurred on carrying the goods to the bonded warehouses, in the importing port and the import duties as well.
1. Loco Price : Is the 'ex-factory' price, it includes the cost of production plus profit margin.
2. F.O.R. (Free on Rail) : Under this, the seller bears the cost of transporting the goods to the railway station and the expenses of placing them on the wagon.
3. F.A.S. (Free Alongside Ship) : This price includes all expenses incurred on transportation of goods from the seller's warehouse to the port. Buyer has to get the goods loaded on the ship at his own expenses.
4. F.O.B. (Free on Board) : The quotation includes F.A.S. price and the cost of loading the goods on the ship at the port of exit.
5. C & F (Cost and Freight) : Cost and Freight covers the price of goods, packing charges, cost of sending the goods to the port, dock dues, loading charges, export duty and freight payable to the shipping company for carrying the goods to the port of destination.
6. C.I.F. (Cost, Insurance & Freight) : This clause in a contract implies that the seller will bear not only the cost and freight but also the charges for insuring the goods against the perils of the sea i.e. marine insurance policy. The exporter pays the premium and secures an appropriate insurance policy.
7. C.I.F.I. (Cost Insurance Freight and Interest) : This quotation consists of, besides cost, insurance and freight.
The interest payable on the capital invested in the goods. When goods are purchased through a commission agent and agent's commission too is included in the price, the quotation is known as & C.I.F.I. & C. If risk of exchange fluctuation is also covered, it is quoted as C.I.F & E.
8. Franco : Also known as free price, this quotation includes all charges for delivery of goods to the buyer's warehouse. It implies the free delivery of goods.
9. Ex-Ship : Such a price implies that the seller will bear all expenses until the ship carrying the goods arrives at the port of discharge.
10. In Bond Price : This price includes all those expenses incurred till the goods are carried to the bonded warehouse at the named port. Charges for the withdrawal of goods from the bonded warehouse have to be borne by the buyer.
11. Landed Price : It indicates that all expenses upto the goods discharged on land at the port of destination are met by the exporter.
12. Duty Paid Price : This price includes all those expenses which are incurred on carrying the goods to the bonded warehouses, in the importing port and the import duties as well.
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