How to make money on tenders: the essence of earnings, pros and cons, tender bidding and income calculation

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Tendering has become very popular in the last few years. Basically, customers are state and commercial enterprises, therefore, at such auctions, supplying their products to institutions, you can make good money. This is a good opportunity to promote a small business. Various enterprises are looking for suppliers of goods and contractors, and the winner receives a stable consumer, financial support, work and a good income. Tenders are held very often, but not everyone knows how to make money on tenders, and whether this is possible in principle.

How the system works

The essence of the game is the same: all participants offer their services and goods, while observing the conditions of the customer, in order to win. The organizer of the tender has the opportunity to choose the most profitable contractor, and the participant who won the auction - a regular consumer, the amount of work and the sale of goods, thereby receiving economic benefits.

How to participate

Customer can be individuals and organizations,commercial structures and state enterprises. The state is one of the largest consumers, so most entrepreneurs and small businesses try to take part in such auctions. By law, individual entrepreneurs and legal entities can participate in the tender.

To start bidding, you need to open an individual entrepreneur or LLC, be a conscientious taxpayer and meet the requirements of the commission. If the application is submitted electronically, you will have to issue an electronic signature in advance, or collect the entire package of required documents and take it to the appropriate office.

For online trading, you will need to choose a suitable platform, register on it and get accreditation, that is, provide all the information about the company and about paying taxes.

Variety of auctions

There are several types of trades:

• Open bidding - when information about the tender is publicly available, and anyone who meets the conditions of the tender can take part. All competitors submit applications and the necessary package of documents. When all bids have been submitted, the bidding committee selects the most profitable contractor.
• Closed auction. As a rule, only those enterprises that are approved by the customer himself or are engaged in a narrow specialization participate in such an auction.
• Electronic trading. Contractors from other regions can participate in this type of auction, since the submission of applications and the drawing take place electronically.

Morethe probability of winning state lots, since there are more stringent regulations and, according to the law, the customer should not be interested in who exactly will become the winner. It is this principle that helps many aspiring entrepreneurs win and earn money on tenders without investments at the initial stage. So, is it possible to bid without initial capital?

Pros and cons

Tenders are not income for beginners, because customers give more preference to enterprises with experience in the service market. In addition, you need:

• Be digitally signed, depending on the selected trading platforms.
• Have or open your own business, register a legal entity.
• Spend some time tracking the process and picking better deals.
• Register on the sites. Sometimes registration fees are required.
• You need to have financial security in the form of 15 percent of the amount offered by the customer. This amount of the contractor's money is reserved before the start of the tender.

For beginners, the above rules are not always feasible. But if you look from the other side, there are pluses in this, thanks to which anyone will learn how to make money on tenders without investment or at minimal cost:

• You can choose contests that do not require an electronic signature and submit documents in paper format.
• It is not necessary to register on public procurement sites.
• Not all tenders require a guarantee to be paid prior to the auction. Money is deposited aftertermination or fulfillment of the terms of the contract.
• Individuals can also bid, but only if the organizers are local authorities or businesses. For a wider selection of applications, you need to open an IP.
• Registration of a legal entity does not take much time.

Even as a business owner, you can have both physical and legal registration, increasing your chances of winning.

Nuances of earnings on the tender

Representatives of small businesses and private entrepreneurs are wary of the idea of participating in tenders, explaining that everything is seized, bought and it is known in advance who will be the winner. Inexperienced and short-sighted managers may not risk wasting their time bidding. But how to make money on tenders and not lose money if you are engaged in the supply of goods or services?

To become a bidder, you need to familiarize yourself with what the customer wants, what types of services he needs. Government orders are published on special websites, and if you look through them, you can quickly find the order you are interested in. Even if the cost of the work does not correspond to the market, you can contact the organizers for information on this issue. Many potential applicants, seeing the inappropriate value, will refuse the competition on their own, and you may have a chance to become a participant and, possibly, even a winner.

Or vice versa, the cost of trading is too tempting. It is possible that such prices for services are setspecifically for a particular company. Participating in the struggle for such a tender also makes sense, especially if you know how to bargain, and your goods and services meet the requirements of the customer. It will not be superfluous to check the reputation of the customer company to identify fake winners. If the same legal entities became winners in previous auctions, then the probability of making money on tenders is reduced to a minimum, and it is not worth wasting your time on such a tender.

Trading practice over the past few years has proven that the Commission favors bidders who do their job and deliver goods at an affordable price. However, you should not deliberately underestimate the cost of services. Then how to make money on tenders? The answer is simple - prove your performance.

Competent approach

Shadow of doubt that auctions are not always fair, is always present. But if you think only about this, then you won’t be able to make money on the auctions and expand your activities. If you are already wondering whether it is realistic to make money on tenders, then it's time to start acting. To eliminate risks and possible errors in bidding, it is recommended to obtain as much information as possible about how the contract system for providing organizations with services and various goods works. Next, consider how to make money on tenders in principle.

Some tricks

Patience: Carefully and patiently following customer requests can help win. Anything can happen. Technical error, changethe cost and type of service required by the organizer, as well as other points, may play into your hands, while others have already refused to compete for this lot.

Frequent bidding: the more often you take part in different contests, the more likely you are to win and find out if you can make money on tenders in this way. This is a real valuable experience.

Adequate assessment of opportunities: there were cases when the contractor deliberately underestimated the cost of services in order to win the lot, and then could not fulfill the set conditions even at the price that he himself offered.

Good application: A well-written application is your business card. You need to clearly formulate your proposal, and most importantly - write it without errors. Sloppy applications are ignored by customers in most cases. Show your serious approach to business and the fact that you are really ready to cooperate.

Expert Help

Most likely, if you have never participated in tenders before, you should consult with your accountant, who will assess the economic situation of the enterprise and tell you whether it is realistic to make money on tenders in this or that case.

Participation and winning the competition can improve the financial condition of the company. Providing the customer with information and documents confirming the quality of the services provided and the profitability of further cooperation increases the chances of winning. And there are a lot of little things and documentation that an experienced economist is well versed in.

Besides being a candidate forfull-fledged bidders, it would be useful to stay up to date on the market and have information about how much they earn on tenders, how much your product is in demand. A specialist in this matter will help you competently prepare documents, issue guarantees and even accompany your participation in the auction.

Financial guarantor

One of the requirements of the tender is a financial guarantee. The customer requires 10 to 15 percent of the tender amount to be paid into the application in order to be sure of the solvency of the future contractor. In the future, this money will go as a pen alty or financial loss in case of non-fulfillment of the terms of the contract. There are three types of guarantees:

• Tender guarantor - 5 percent of the value of the lot. Guarantees to the organizers that the winner will fulfill his obligations after the auction. The amount is paid at the time of signing the contract.
• About 10 percent contractual guarantee to cover fines, pen alties and other unforeseen situations.
• Bank guarantee - up to 30 percent of the amount invested by the customer. Used to pay advances to the contractor and paid by the bank.

Almost all auctions require a certain amount of money to be deposited to guarantee the organizers the solvency of the candidate. In the event that the winner refuses to fulfill the contract unilaterally, the fee is not refundable.

Bank guarantee

One of the answers to the question of how to make money on tenders and public procurement without having a lot of money at your disposal will be a bank guarantee. This wayhelps to gain financial we alth from scratch. Banks provide various conditions when issuing such guarantees to firms, but more often this is formalized as a loan. And for the organizers of tender auctions, this is more than a reliable guarantee. Even with the minimum amount of the guarantor, you can make it, and then do your job (in case of victory) at the expense of the advance paid by the customer.

How else to make money on tenders

There are companies that participate in the competition for the lot, but do not have the slightest experience in the service they are competing for. They just lower the cost and wait. If their application wins, the companies either provide services themselves or sell the won lot to those who can actually fulfill the requirements set out in the contract. You ask: is it possible to make money on tenders in this way? Yes, if you have good experience in similar transactions.

On the forums you can find announcements of help in the tender. To win, you can use the services of such comrades who know their business. For a fee, they can win any deal for you. Even blacklisting and tender pen alties do not scare anyone, because a successful deal completely covers any costs.

There are special business support centers that can advise on this issue, assess the company's capabilities and even advance government orders on favorable terms.

Goal to win

To participate in tenders and start earning on them, you need a littlework hard, set goals and achieve them. You need to improve your skills and develop. You can visit thematic conferences or chat with those who specialize in tenders.

Such activity requires vital energy, as a large amount of information is processed in the head. Combining passion and calm, you can enjoy success and victories.

To participate or not

So now that you've learned how to make money from tenders, the decision to bid or not is up to you. Such auctions can significantly multiply your profits, provide an additional front of work, a stable consumer.

Doubts that the winner has already been chosen in advance and that the auction has been paid can be hidden in a dark chest. The new legislative rules for tendering have made the selection process among all participants transparent.