Markets & pricing

Firm offer vs. indicative price

An indicative price signals the market level and does not bind the seller; price ranges in listings are usually of this kind. A firm offer is a binding offer for a defined quantity, quality, delivery and payment terms, valid for a stated period (e.g. “valid 24 hours”, without “subject to prior sale”), which forms a contract as soon as the buyer accepts it. Because raw material markets move quickly, firm offers are usually short-lived, and reservations such as “subject to availability” should be watched for.

Related terms

Request for quotation (RFQ)

A document in which a buyer asks suppliers for prices, stating the material, specification, quantity, delivery place, Incoterm, payment terms and required delivery date. A good RFQ also sets the acceptable quality range, required documents (COA, TDS, certificates), packaging and how long offers must remain valid, so that offers can be compared like for like. On the marketplace, published buying requests are sent to verified suppliers in the relevant category.

Offer validity and price revision

The period during which an offer can be accepted unchanged – kept short for volatile raw materials, from a few hours to a few days. Contracts with long lead times or periodic deliveries use price-revision (escalation) clauses: if a raw-material index, energy cost, freight or exchange rate moves beyond a set threshold, the price is updated by formula. Such clauses stop fixed-price contracts from collapsing into cancellation or default when markets move sharply.

Proforma invoice PI

A preliminary invoice issued by the seller before shipment, listing the product, quantity, unit price, Incoterm, payment terms, delivery time and bank details. Buyers use it to open a letter of credit, pay an advance or apply for import licences or foreign-exchange allocation. It is not a tax invoice; once countersigned by the buyer it can serve as the contract in simple deals, but larger transactions deserve a full sales contract.

Explained in the trade handbook

Trade handbook