6. FOB build-up, margin and negotiation
Assemble the FOB price, test the margin against real risks, and negotiate on evidence rather than instinct.
Assemble an FOB quotation from the costed elements, add commission, financing and overhead recovery, then stress-test the margin against yarn price movement, efficiency shortfall and a late shipment. Write the assumptions you would defend in a buyer negotiation.
By the end of this module: Assemble the FOB price, test the margin against real risks, and negotiate on evidence rather than instinct.
Prerequisite: Complete module 5 and its readings first.
1. Read these chapters
2. Then work through these stages
Module quiz
5 questions on 6. FOB build-up, margin and negotiation. Answer them all, then check your score before moving on. 4 correct or more is a pass. Your best score is saved on this device, and to your account when you are signed in. This is a self-check, not an accredited assessment.
1. What does an FOB price cover?
2. Total cost is 7.00 and the FOB quotation is 8.05. What is the margin percentage on the FOB price?
3. Yarn price rises 10% after quotation, and fabric is 60% of cost. What is the approximate cost impact?
4. Which quotation practice protects margin honestly?
5. What is the strongest negotiating position on price?