Price estimation tips - MORBI | Tiles manufacturing hub of India

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Price estimation tips

Knowledge of Industry

If you are new to tiles business the calculation of landed price may be little confusing. Especially when they are trying to source from Morbi directly. Here we are trying to demystify tile procurement costs.

There are mainly two delivery terms used:

  • Ex-factory

  • FOR (Free On Road) (e.g. FOR Jaipur, FOR Coimbatore etc)


Unless specified all manufacturer quote you Ex-factory price. Which means this price is without…

  • Excise duty

  • Sales tax (or VAT if it is local sale in Gujarat)

  • Transportation


Now comes the cost calculation part.  We will take a examples. Mr. Sharma needs to order 300x600mm wall tiles from Morbi. The factory offered him Rs. 220/box ex-factory...

Ex-factory rate                          Rs. 220.00
PLUS  Excise duty @ 12.36%  Rs. 27.19
------------------------------------------------------------
                                                   Rs. 247.19

CST (Central Sales Tax):
Now we will need to add sales tax (CST) amount to this. If Mr. Sharma can provide "C" Form for this sale then only 2% CST will be applied. If Mr. Sharma can’t provide "C" Form then full CST will be levied. Let us assume Mr. Sharma having a firm with sales tax registration. So he can issue a "C" Form.


PLUS  CST @ 2%                       Rs. 4.94
------------------------------------------------------------
                                                   Rs. 252.13

Transportation cost (freight):
We need to calculate the fraction of transportation per unit. 

e.g. Morbi to Jaipur transportation is Rs.1300/Tonne (1000 kg)
Now if 1 box of 300x600 is 17 kg there will be 59 such boxes in 1 tonne (1000 kg)
1300/59 boxes = Rs. 22/box transportation cost

So per box transportation will be Rs. 22

PLUS  Transportation cost      Rs. 22
------------------------------------------------------------
                                                   Rs. 274.13/Box for 300 x 600 mm wall tiles box

Hence this final price will be landed price at the destination. It is also called FOR price.

Note:

  • Above method can work for any size of vitrified tiles or wall tiles. You will need to know weight per box for different size

  • Please make sure who will arrange for transit insurance. In case factory is arranging transportation they will have all India transit insurance. If you are arranging transportation please arrange for insurance as well!

Order: When you order tiles we recommend adding 10% more than the required quantity due to below reasons...

 Breakage during transportation

 Wastage during tile fixing
 Mostly you will need to cut tiles at the ends of the room
 We also recommend keeping extra tiles with you to replace in case there is any future damage to fixes tiles.


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