In a market where memory pricing has been moving, a quotation and an order placed six weeks later can be two different prices. This is what happens mechanically, how the gap is normally resolved, and the three terms that put a boundary around it before it becomes an argument.
A quotation is a statement about a moment, and an order is a commitment about a period. When the interval between them contains a market move, three outcomes are possible: the supplier honours the quoted price and absorbs it, the buyer accepts the new price, or the difference is shared or capped by a term agreed in advance. Which one happens is almost entirely decided by whether the quotation stated a validity period and whether the order named a mechanism. A buyer with no written validity has no position except goodwill.
What actually happened
The buyer received a quotation in March. The project took six weeks to get approved internally. The order was placed in May, referencing the March quotation. The supplier came back with a higher price.
From the buyer’s side this looks like a broken promise. From the supplier’s side it looks like a quotation that had expired. Both are describing the same document, and neither is entirely wrong — which is exactly why the position has to be established in writing rather than argued afterwards.
The mechanics, plainly
Flash product prices are dominated by the memory component, which is a traded commodity with a market that moves. A supplier who quotes today is quoting a price that includes what they expect to pay for material. If the material moves before the order is placed, the quotation is describing a cost they no longer have.
There are only three ways to resolve that gap:
The supplier absorbs it. Possible if the move is small, if they hedged, or if they value the relationship more than the margin. Not something to rely on, and not something a good supplier should be asked to do repeatedly.
The buyer accepts it. Straightforward, and correct when the quotation genuinely expired. Also correct when the move is small relative to the friction of arguing.
A term determines it in advance. A validity period, a quantity cap, an index mechanism, or a shared-increase clause. This is the only version that produces a predictable outcome, and it is the only one fully within the buyer’s control at the point of quotation.
What a quotation normally means
In commercial practice, a quotation is generally an invitation for an order rather than a binding offer. The contract forms when the order is accepted.
That has a consequence most buyers do not internalise: the quotation can be withdrawn or revised before acceptance, unless it states otherwise or local law says otherwise. So the protection you have is what the document says, not what receiving it implied.
If the price needs to hold, the quotation has to say so — a validity period, or an explicit statement that the price is firm for a defined window. Ask for it on the document. A verbal assurance that the price will hold is worth what you paid for it.
The three terms worth asking for
One: a stated validity period. Short and explicit beats long and vague. Ask when it expires. Then diarise that date, because a quotation that expires while your project is in internal approval is the most common version of this whole problem.
Two: a firm-price window on the order. Once the order is placed and accepted, the price should be fixed for the production period. Ask for that in the order confirmation: price firm for the production window ending [date]. This is a reasonable ask and most suppliers will agree to it, because it is bounded.
Three: a mechanism beyond the window. If the production period is long or the quantity is large, ask what happens if the market moves during it. Options include a cap on the increase, a shared-difference arrangement, or a reference to a published index. Each has a cost — usually a slightly higher base — and each is better than an unstated expectation.
The volatility question in more detail covers what is reasonable to expect here.
If the price has already moved
Work through four steps, in order.
Step one: read the order. What exactly did you confirm, and what did the supplier accept? An order that confirmed a price and was accepted without qualification is a contract, and the movement is the supplier’s. An order placed against an expired quotation, or accepted “subject to confirmation”, is a different position.
Step two: quantify it. How much is the increase, in absolute terms, and how does it compare to the cost of delay? A rise that costs less than two weeks of a delayed launch may not be worth the negotiation. Buyers frequently fight harder over small amounts than the consequences justify.
Step three: decide what you will do if the increase stands. Re-source? Reduce quantity? Change grade? Accept? Having an answer before the conversation changes the conversation.
Step four: talk before the schedule is at risk. The worst version of this dispute is the one that surfaces after production should have started. Whatever the outcome, the days spent arguing are days the goods are not being made.
The prevention checklist
| At quotation | At order | During production |
|---|---|---|
| Ask for the validity date | Confirm the price explicitly | If a rise is signalled, quantify it immediately |
| Ask what happens after it expires | Ask for a firm-price window | Keep the answer in writing |
| Diarise the expiry date | State the quantity the price covers | Decide your fallback before negotiating |
The single highest-value item on that list is the least technical: diarise the validity date. Most of these disputes are not about markets. They are about a quotation that quietly expired while a project sat in internal approval, and nobody noticed until the order went out.
Our own position, stated
Because we work per order rather than from a published rate card, our pricing page explains the structure and states that terms are confirmed per order against the specification. The validity period appears on the quotation, and the price is fixed for the production window on the order confirmation.
What we will not do is offer a long fixed price with no mechanism behind it. If you need price certainty beyond the production window, say so and we will propose a structure — a cap, a quantity band, or a reference — with the cost of that certainty shown. It will often be slightly higher than the open-market figure, and that is the price of the certainty rather than a markup.
If you are planning an order against a quotation you already hold, send it back with the quantity and the date and we will confirm whether the terms still stand rather than leaving you to discover it at the order. Cathy will put the validity and the firm-price window in writing.
Frequently asked questions
Is a quotation legally binding?
Usually not in the way buyers assume. In most commercial practice a quotation is an invitation to order rather than a binding offer, and the order and its acceptance form the contract. That means a quote can generally be withdrawn or revised before acceptance unless it says otherwise or local law provides otherwise. The practical implication is that the protection you have is what the quotation states in writing, not what you inferred from receiving it. If the price must hold, say so and get it confirmed on the document.
What is a fair validity period?
For flash products in a moving market, short and stated is better than long and unstated. A validity period that ends before the order is placed is honest; a validity period that covers a long production window at a fixed price is a promise the supplier may not be able to keep, and a supplier who makes it anyway is one to be cautious with. The useful question is not how long the validity is, but what happens between quotation and order, and that has to be answered explicitly.
Can I lock a price for a long period?
You can ask, and some suppliers will agree within limits. What makes it workable is a mechanism rather than a promise: a fixed price up to a stated quantity or date, a cap on increases beyond it, or a formula tied to a published index. Each has a cost, usually visible as a slightly higher base price, because the supplier is carrying risk. A long lock with no mechanism behind it tends to be honoured cheerfully until the market moves, and then renegotiated — which is the outcome you were trying to avoid.
What do I do if the price rises after I have placed the order?
First, establish what the order actually said. If the order confirmed a price and the supplier accepted it, that is the contract and the supplier carries the movement. If the order was placed against a quotation that had expired, or if the order was accepted subject to confirmation, the position is weaker. In practice, if the increase is real and material, the usual resolution is a discussion about sharing it — but that is a commercial conversation, and you should have it while the goods are still producible, not after the schedule has slipped.
Does this happen with small orders as well as large ones?
It happens to both, but matters more on large orders because the absolute amount is larger and because large orders are harder to re-source at short notice. Small orders can sometimes absorb a rise by reducing scope or switching to a grade that is more available. The mechanism to put in place is the same at any size: a stated validity, an order that confirms the price explicitly, and a conversation before the schedule is at risk rather than after.