What is RFQ (Request for Quotation)? RFQ (Request for Quotation) Review

RFQ (Request for Quotation) means Request for Quotation. A Request for Quotation (RFQ) is a standard business process, the purpose of which is to invite suppliers to participate in the bidding process to bid for a specific product or service. RFQ is often synonymous with IFB (Invitation to Bid).

Written meaning

RFQ (Request for Quotation) means request for quotation in written form. This word often appears in foreign trade correspondence. When a buyer sends an inquiry to a seller, it may be in the form of an email or fax. The word RFQ will appear in the header of the fax document or the subject of the email.

About RFQ

An RFQ can be a virtual offer or a real offer. Often after the seller makes an offer, the buyer will make a counter-offer. If it is a real offer, the buyer and seller will finally settle on a price that they both agree on, and the transaction is completed.

In international trade, all transactions start with RFQ and are gradually negotiated. Foreign trade salesmen should not only provide simple quotations for RFQ, but also be good at using various techniques to induce customers, so as to turn each RFQ into a real deal and finally sign a contract and order.

RFQ has a certain degree of confidentiality during business negotiations.

In order to get the right quotes, RFQs usually include specifications for the item/service to ensure that all suppliers are bidding on the same item/service. Logically, the more detailed the specifications, the more accurate the quote will be and the more comparable it will be to other suppliers. Another reason to be detailed when sending an RFQ is that the specifications can serve as a legally binding document for suppliers.

stage

An RFQ is usually divided into four parts: preparation, processing, award, and closing.

use

RFQs are often used when products and services are standard or off-the-shelf, so it is easier for companies to compare quotes. A company typically asks for quotes when it knows the quantity of a product it wants to buy. For example, a government agency that wants to buy 500 computers with a specific hard drive size and processing speed announces an RFQ, and since the product is standard, the agency can easily compare different quotes. An RFQ is usually sent to several potential suppliers, asking bidders for pricing. It may contain information that bids must include, payment terms, factors that determine which bid the company chooses, and a deadline for bids. An RFQ focuses primarily on pricing. If the minimum criteria are met, the supplier with the lowest bid is usually awarded.

Requests for quotes are most commonly used in commercial settings.