How to Adapt Your Quoting Strategy in a Changing Environment

We all know the economic environment can be unpredictable, and the impact on material pricing is affecting manufacturers in more ways than one. From unexpected tariff increases on steel and aluminium, to supply chain problems and import taxes, material prices are constantly fluctuating, making it difficult for shops to produce a reliable quote for their customers. Gone are the days where a monthly review of material prices was enough to keep up with the markets, these days it’s weekly, and sometimes even daily, updates to ensure your quote is accurate and fair.

Reviewing material prices is all very well, but if the price suddenly soars overnight, how do you adapt without losing work? Having a few quoting strategies up your sleeve can help to navigate the treacherous waters of material pricing, and protect you from unexpected change.

So, here are four of the most common quoting strategies for managing a constantly changing environment. While some are stand alone strategies, several can be used in combination, depending on your circumstances.

1. Reject the Work

While no one wants to turn customers away, if the quote is for a high value material (which comes out of your cash flow) and you have to scrap it due to a minor mistake, you’re looking at a loss making job. When dealing with expensive materials, or working with limited cash-flow, it's more important to be selective with your work and ensure your RFQs will be profitable, rather than saying yes to every job that comes your way.

2. Client Purchase

When the material is more than the labour, both you and the client can end up worrying about finances. Asking the client to source and buy the material themselves means your cash flow is safe, and the client doesn’t have to pay for the additional admin of sourcing the material. This strategy requires a strong level of trust between the client and manufacturer, as you have to trust the client to buy the material on time, and the client has to trust that you won’t scrap the material. If the material is expensive, difficult to source, or something you're not used to working on, this option can save you both a huge headache.

3. Shorten Quote Validity

We’ve all done it. You give a client a quote that’s valid for a month, and a day before it expires the material price shoots up. In the 2025 market, this type of bad luck is almost certain to happen. One way to mitigate this risk is to shorten the length of the quote validity. Instead of a month, provide a quote that’s valid for a week, or two weeks if you’re feeling generous. This protects you from most of the sudden changes in material price, and is a tactic many manufacturers used during the height of the Covid-19 pandemic. As Henry Morris, Head of Machine Shops at AMFG, noted “We saw many of the same market trends during the Covid-19 pandemic, when material prices and the price of purchased goods fluctuated wildly. Many shops only wanted quotes with a very short validity period, so AMFG developed features that enable shops to set quote validity, adjust mark-up, and update material prices quickly and easily.”

4. Margins and Savings

You set your hourly rate, and then in order to make a profit you pop a margin on top to cover your overheads. Standard practice. Lets say you set a 30% margin for your machine time, but in reality it really only comes up to about 20%. That extra 10% gets squirrelled away, and you wonder what it could be used for. A new machine? A new estimator? Consider instead, a buffer for unexpected changes in material prices. Lets be honest, no matter what quoting strategy you use, there will always be quotes that end up losing you money. Being able to swallow this cost without going under is a part of life in manufacturing, and using the extra finance from your margins can help you prepare for this without upping costs for the client.

To develop a long-term, sustainable quoting strategy, using just one approach isn’t enough. The material markets are constantly fluctuating, and are vulnerable on a global scale. In order to survive, manufacturers need to regularly adapt to the changing environment. Use quoting strategies based on your situation, your niche, and your client base, and keep re-evaluating your processes. You can even use multiple strategies at once, or create a hybrid strategy for specific business areas.

The secret behind the strategy

Using multiple quoting strategies is all very well, but finding the time to re-evaluate everything regularly is often impossible. That’s why more and more manufacturers are adopting dedicated estimating and quoting software to streamline their process, as it allows you to adapt faster and with less effort.

Ben Fitzsimons, Manufacturing Consultant, commented “AMFG’s software enables you to estimate costs based on material weight, with the option of changing the material pricing, live, whenever you want. With a customisable costing logic, you can use AMFG to adjust your overheads, material markups, and hourly rates all in one place, making it easier to adapt quickly to whatever comes next.”

So, as you guide your shop through an ever changing environment, consider which strategies will work best for your specific situation, and don’t forget that these days, adapting is the name of the game.

About AMFG

AMFG works with high-mix, low volume manufacturers across the globe, streamlining their operations with our cutting-edge software platform. Our scalable tools automate all stages of manufacturing operations, providing automatic quoting and order management. Using our software, our clients can adapt to complex demand with efficiency and precision, securing their place at the forefront of the manufacturing industry.

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For more information, please visit www.amfg.ai or contact: press@amfg.ai