A tender with seven lots
A manufacturer of kitchen appliances sends out a tender for its scrap and recyclables. Seven lots: steel offcuts, aluminium, copper cable, cardboard, plastic film, wooden pallets and general waste. Each lot lists estimated monthly volumes, current container arrangements and the rebate or charge structure they want: fixed price, index-linked, or a share of the sale price. Responses are due next Friday.
Your sales manager opens a spreadsheet from a tender two years ago and starts adapting it. He needs current buyer prices for each grade, the haulage cost to that site, the container costs, the cost of processing each stream at your yard, and a view on which lots are worth winning. The figures are in several places, some out of date. He works late on Thursday.
He wins two lots, loses five. He is not sure why, and next time he will start from the same old spreadsheet.
Why tenders are priced from scratch
Every tender is different, but the ingredients of a price are the same. They are just never kept in one place.
- Grade values and buyer prices change and are held in the sales manager's head or emails.
- Haulage and container costs by site are not recorded for quoting.
- Processing costs per stream at your yard are rarely known.
- Past tenders, what you bid and whether you won, are not recorded.
- Rebate structures, fixed or index-linked, change how risk sits with you.
What rushed tender pricing costs
Pricing too high loses lots you could have served profitably. Pricing too low wins lots that lose money for the life of the contract, and index-linked structures can make that worse when markets move.
Without a record of past bids and outcomes, you cannot learn where you are competitive and where you are not. Each tender is a new guess.
And the time spent assembling figures is time not spent on the part that needs judgement: which lots to go for and how hard.
How we build a tender pricing tool
What we build brings the ingredients of a price together and records every bid.
- Your grades are recorded with current buyer prices from your offer log or contracts, updated as they change.
- Haulage costs are calculated from the site's location and your haulage rates, by container type and frequency.
- Container costs, such as purchase, maintenance and exchanges, are set per container type.
- Processing costs per stream at your yard are recorded as your own estimate, and can be refined over time.
- For each lot, the tool builds a price or rebate from these, under the structure the tender asks for, and shows your margin. You adjust and decide.
- The response is exported in the tender's format, and every bid is recorded with the outcome, so the next tender starts with your own history.
| Ingredient | Source |
|---|---|
| Grade value | Buyer prices and contracts |
| Haulage | Site location and your rates |
| Containers | Your container costs |
| Processing | Your cost estimate per stream |
| Past bids | Tender history with outcomes |
The next tender
A tender arrives with five lots. The sales manager enters the site and the lots. The tool shows current values, haulage for that site, container costs and processing, and builds a draft price for each lot with the margin. He sees that the film lot barely breaks even at the structure requested, and decides not to bid for it.
He also sees the history: at a similar tender last year, you lost the steel lot to a slightly higher rebate. He adjusts. The response is ready on Tuesday, not Thursday night.
Are tenders priced from old spreadsheets?
- Each tender starts from an old spreadsheet.
- Buyer prices and costs are gathered from several places each time.
- You do not know your processing cost per stream.
- Past bids and outcomes are not recorded.
- You are not sure why you win some lots and lose others.