How do I check an electronics manufacturer’s quoting before buying?
Ask to see how quotes are built from the bill of materials, how component lead times and cost changes are handled, how long a quote stays valid, and who prepares them. Compare past quotes with orders won, and find out whether the work is turnkey or customer-supplied.
In an electronics manufacturer, a quote is built part by part, not by estimating hours at a machine. Component costs move, lead times stretch and customers ask for requotes. How well the shop handles that affects whether the work it wins turns out as expected. Ask to see the process, not just a few finished quotes.
The bill of materials
Ask how the shop turns a customer’s bill of materials into a quote: which suppliers it checks, how it treats parts it cannot source, and what it adds for labour, setup and testing. Have your accountant look at how those pieces are recorded, since inventory treatment affects the books.
Lead times, validity and requotes
Ask how long a quote stays valid and what happens when component costs shift after the customer accepts. Ask to see a few requotes and how customers reacted, and ask whether the quoting terms are written down and where disputes have arisen before.
Who quotes, and what leaves with them
If the owner prepares every quote, the skill and many customer relationships may leave with them. Ask who else can quote, whether templates exist and how a new person would learn. Compare with the machine shop quoting check to see how electronics differs.
Turnkey and customer-supplied work
Turnkey means the shop buys the parts, so it carries component risk and inventory. In customer-supplied work, the customer sends the parts and the shop sells labour. Ask for the mix, and for the history of quotes sent against orders received.
Related reading
11 pages on the same subject, grouped by topic.
Due diligence
Buying
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat is inventory
- 03Business Development Bank of CanadaGovernmentWhat are financial statements?
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