How to Price a Tender: Cost, Risks, Dumping and Room to Cut

Start with full cost, not profit

Price in a tender starts with cost, not with the profit you want. If you don't know your cost, any room to cut turns into a gamble. List every expense that will arise from this specific contract.

Here is what suppliers often forget:

• Logistics to the delivery point, including loading and unloading.
• Packaging, marking, cargo insurance.
• Bank guarantee or bid security, if required.
• Taxes and fees you pay as a supplier.
• Salaries and travel for staff working on the project.
• Possible penalties for late delivery or quality mismatch.

Take a similar contract you did before and check whether every line is covered. Often delivery eats 5–10% of the amount, and it was missed.

Add risk instead of hoping for luck

Risk is not an abstraction — it is money. Identify which risks are likely in this tender and estimate each in percent or sum. Add them to cost before you name a price.

Main risks for a supplier:

• Your suppliers raise prices during contract execution.
• Currency swings if you buy in foreign currency but get paid in soum.
• The buyer pays late — your money is frozen and you pay loan interest.
• Unexpected costs: transport downtime, repeat inspection, replacing defective goods.
• Penalties for missed deadlines — check their size in the draft contract.

You don't have to cover everything at maximum. Estimate probability: if a risk is unlikely, a small sum is enough. But ignoring it completely is not an option.

Decide how much you can cut at auction

Many tenders involve price reductions. If you name a price with no margin, the first step puts you in the red. Room to cut is the gap between your starting price and the minimum at which the contract stays profitable.

How to calculate it:

1. 1Take full cost with risks.
2. 2Add the minimum acceptable profit — say 5–10%.
3. 3That gives your floor price. Never go below it.
4. 4Set your starting price above the floor by as much as you are ready to bargain.

The size of the margin depends on competition. Tashkent has the most open lots — 994 according to TenderLabs data as of 27 October 2026. Competition is higher there, so you need more room. In regions with fewer lots you can bargain less.

Don't set a starting price out of thin air. The buyer sees an inflated price and may reject your bid if it is above market.

Dumping: when a low price works against you

Dumping means a price below cost or with no profit. Sometimes it looks like a way to win at any cost. In practice such a contract often brings a loss and a damaged reputation.

Why dumping is dangerous:

• There isn't enough money to deliver quality — deadlines start to slip.
• The buyer puts you on the list of unreliable suppliers.
• You won't get future tenders, or you'll get them with difficulty.
• Penalties and legal costs can exceed all your profit.

Sometimes a low price is justified: you have free warehouse space, a return trip for transport, or you want to enter a new client. But it must be a conscious decision, not desperation.

Check yourself: if after signing the contract you look for ways to cut corners on quality, you priced too low.

Check the price before you submit

Before sending your bid, do a quick check. It takes 15 minutes but saves you from mistakes.

• Compare your price with prices of similar contracts over the past months. If yours is 20–30% higher, explain why — or lower it.
• Make sure all mandatory costs are included: delivery, warranty, training, disposal.
• Check the draft contract for terms that raise your costs: for example, payment 60 days after acceptance.
• See how many suppliers have already submitted bids. If there are many competitors, your room to cut should be bigger.

If after the check the price seems too low, it's better not to submit. A missed tender is cheaper than a loss-making contract.

What to do today

Start with one action: calculate full cost for the nearest tender you want to join. Don't use numbers from your head — pull invoices, supplier contracts, waybills.

Then set your floor price and room to cut. Write them down. When the auction starts, you'll have a ready reference, not panic.

If you want to see more suitable tenders and not miss new ones, try TenderLabs: the service gathers procurement into one feed and sends alerts. That way you can choose the ones where your price will be competitive, instead of accepting any terms.