An export quotation looks like one number but contains a dozen: the purchase or production cost, the VAT export rebate (export tax rebate), inland transport, port and customs charges, ocean or air freight, insurance, bank charges, the exchange rate and the margin, all shifting with the Incoterm. Sales teams often quote FOB and CIF from a rule of thumb and discover the loss after shipment. This skill builds the price from the costs and produces a quotation the buyer can compare.
Write the quotation in English with a Chinese cost sheet (cost calculation sheet) and explanations in Simplified Chinese unless asked otherwise. Incoterms 2020 are an ICC publication; the summaries here are for orientation. Rebate rates, freight, surcharges and exchange rates change; every rate is marked to be verified and should be confirmed with the tax bureau's rebate rate lookup, the freight forwarder and the bank. Not tax or legal advice. For the reply email around the quotation, see cn-inquiry-reply; for a tradesperson's job quote, trade-quote-builder is the separate skill.
Required Inputs
Ask for these if not provided, otherwise infer and label the assumption:
- Product: HS code if known, unit, purchase price including VAT (VAT-inclusive purchase price) or production cost, VAT rate and rebate rate
- Order: quantity tiers, packing (units per carton, carton size and weight), containers or cubic metres
- Logistics: factory location, port of loading, destination port or place, quotes from the forwarder (inland, port charges, freight, surcharges)
- Terms requested: FOB, CFR, CIF, FCA, CIP, DAP, DDP or several
- Money: target margin, exchange rate assumption, payment terms (T/T deposit, L/C, D/P), bank charges
- Validity: how long the price must hold
Output Structure
1. Cost calculation sheet (RMB)
| Item | Calculation | Amount |
- VAT-inclusive purchase price
- Export tax rebate = VAT-inclusive purchase price ÷ (1 + VAT rate) × rebate rate (to be verified: the rate for this HS code)
- Actual cost = VAT-inclusive purchase price − rebate amount
- Domestic charges: inland transport, customs declaration and inspection fees, port and terminal charges, document fees, bank charges
- Export cost = actual cost + domestic charges
- Profit Each figure from the person's inputs or a forwarder quote; assumptions labelled.
2. Quotation derivation by Incoterm (Incoterms 2020, to be verified)
| Incoterm | Where the seller's responsibility ends | Charges added | Unit price (USD) |
- FOB / FCA: export cost plus margin, converted at the exchange rate
- CFR / CPT: plus main carriage freight
- CIF / CIP: plus insurance (commonly on 110 per cent of the CIF value; CIF requires at least Institute Cargo Clauses (C) cover, CIP at least (A) under Incoterms 2020, to be verified)
- DAP / DPU / DDP: plus destination costs, and for DDP the import duties and taxes, which the seller should quote only with a confirmed import cost Show the formula, especially that CIF = (FOB + freight) ÷ (1 − 110% × insurance rate).
3. Quantity tiers
Prices for two or three quantity tiers, showing how fixed costs spread.
4. Quotation sheet (English)
Header (seller, buyer, date, quotation number), item table (description, specification, HS code, unit price by term, MOQ, packing), Incoterm with the named place (for example "FOB Ningbo, Incoterms 2020"), lead time, payment terms, validity, exchange rate basis, what is excluded, and a signature block.
5. Chinese summary and risks
For the sales manager: margin at each term, the risks the seller carries under each (freight increases, DDP import tax, currency), and the walk-away price.
Quality Checks
- Every cost has a source or is labelled as an assumption
- The rebate calculation uses the VAT and rebate rates for the HS code, marked to be verified
- Each Incoterm includes exactly the costs the seller bears for it, with the named place stated
- Validity and exchange-rate assumptions are on the quotation
- DDP is only quoted with confirmed import duties and taxes
- The margin and walk-away price are visible internally but not on the buyer's copy
Anti-Patterns
- CIF as FOB plus a guess. Get a freight quote and calculate insurance properly.
- No validity date. Freight and exchange rates move; an open quote is a free option for the buyer.
- "FOB" with no port or Incoterms version. Always name the place and "Incoterms 2020".
- Forgetting the rebate or counting it twice. Rebate depends on the HS code and on correct export declaration.
- Quoting DDP blind. Import duties and VAT can wipe out the margin.
Example Trigger Phrases
- "The VAT-inclusive purchase price is 50 RMB, VAT 13%, rebate rate 13%, one 40-foot container holds 5,000 pieces; help me calculate the FOB Ningbo and CIF Hamburg quotations."
- "The customer wants a DDP quotation to the US; what should I pay attention to?"
- "Help me make an English quotation sheet with three quantity tiers."
- "What is the difference between FOB and FCA? Which should we use for container shipments?"
- "Build an export quotation with a cost build-up for several Incoterms."