“Your price is too high” is the weakest sentence in purchasing. The vendor hears it from every buyer, it gives them nothing to work with, and the usual reply is a cosmetic 2–3% discount. What actually moves a price is specifics: showing the vendor you understand why their number is high, and giving them a way to change it.
After 35 years of buying equipment and services for oil & gas EPC projects, this is the sequence that works.
Step 1: Before you say anything, find out why it is high
Most “expensive” quotes are not expensive. They are quoting a different scope. Before you call anyone, normalise all quotes to the same basis:
- Same scope: testing, painting spec, spares, special tools, documentation, site support.
- Same delivery terms: Incoterm, named place, delivery date.
- Same commercial terms: payment milestones, warranty period, liquidated damages, bonds.
A quote that looks 15% higher often includes a factory acceptance test, commissioning spares or a longer warranty that the “cheap” bids quietly excluded. If so, the expensive vendor is not your problem, the incomplete bids are.
Once scope is equal, a high price comes from one of three causes:
| Cause | How to spot it | What moves it |
|---|---|---|
| Scope: they priced more than you need | Extra items, a higher spec, gold-plated documentation | Clarify or remove the extra scope |
| Risk: they priced uncertainty | A vague spec, tight delivery, uncapped LDs, a long payment wait | Remove or share the risk |
| Margin: they think they can | Same scope and terms, still well above the range | Credible competition and a clear deadline |
Step 2: Five lines that work
- Anchor without revealing competitors. “Your price is outside the range we have received for the same scope. Before we go further, can you walk us through your build-up?”
- Ask for the breakdown. “Please split material, fabrication, testing, documentation, packing and freight.” A vendor who will not break down a large package is usually protecting margin, not cost.
- Target the risk premium. “Which requirement is driving your cost? If the 12-week delivery were 16 weeks, what would that do to the price?”
- Trade, don’t beg. “If we move to 30% advance against a bank guarantee instead of 10%, what improvement can you offer?” Payment terms, combined packages, longer validity and repeat-order potential all have value to a vendor.
- Give an honest deadline. “We close the commercial comparison on Thursday.” A real deadline gets a real number.
What not to do
- Never share a competitor’s price or documents. It breaches confidentiality, most procurement policies forbid it, and it teaches every vendor that their own quote will travel.
- Don’t bluff a number you don’t have. Experienced sales engineers know the market and will call it.
- Don’t ask for “best and final” in round one. You lose your last lever before you need it.
- Don’t negotiate price before technical evaluation is closed. Otherwise the vendor re-prices every clarification.
Email template
Subject: [RFQ No.] – Commercial clarification before evaluation
Dear [Name],
Thank you for your offer [ref, date]. Your technical submission is acceptable subject to the attached clarifications. Commercially, your price is outside the range we have received for the same scope.
Before we finalise our evaluation on [date], please provide:
1. A cost breakdown: material, fabrication, testing, documentation, packing and freight.
2. Your price impact if delivery is extended to [X] weeks.
3. Your best offer on the basis of [alternative payment terms / combined scope].Regards,
[Buyer]
When the price is high for a good reason
Sometimes the high price is justified: a sole-source OEM, a genuinely better scope, or the only vendor who can meet the date. Then stop pushing price and negotiate terms instead: payment milestones, spares included, a longer warranty, an LD cap or a price-validity extension. Document why you accepted it. That note protects you at audit time.
Prepare in 30 minutes instead of half a day
The RFQ Edge Method covers this exact situation in Step 3 (Interrogate the Quote) and Step 4 (Negotiate from Leverage), with ready AI prompts to find exclusions and build your negotiation agenda. To check how much leverage you actually have before the call, use the free Supplier Negotiation Leverage Calculator. To normalise several quotes to the same total cost first, see the RFQ & Vendor Comparison Toolkit.
Always follow your organisation’s procurement and confidentiality policies.