Request for quote (RFQ)
A request for quote is a formal document sent to suppliers soliciting pricing for clearly-specified goods or services. RFQs define exactly what the buyer needs, including specifications, quantities, delivery requirements, and terms, asking suppliers to respond with their price and any relevant conditions. RFQs are the workhorse of tactical procurement, used when requirements are well-defined and the primary evaluation criteria is price.
Examples
Component sourcing: An electronics manufacturer sends an RFQ to 5 qualified suppliers for 10,000 units of a specific connector part number, requesting prices at various price breaks, lead times, and MOQ information. Suppliers respond with unit pricing, tooling charges if applicable, and delivery schedules.
Raw material procurement: A plastics company issues an RFQ for 50,000 pounds of a specific resin grade, specifying the material standard, packaging requirements, and delivery schedule. The RFQ requests pricing FOB destination and asks suppliers to confirm they can meet quality certification requirements.
Machined parts: A medical device company sends detailed drawings and specifications to machine shops requesting quotes for prototype quantities and production volumes of a custom bracket. The RFQ includes material callouts, tolerances, finish requirements, and quality documentation needs.
Definition
RFQs work best when the buyer knows precisely what they need and can specify it unambiguously. This clear specification enables apples-to-apples comparison of supplier responses, making evaluation straightforward. The more ambiguity in requirements, the more likely an RFP process would be more appropriate.
An effective RFQ includes complete technical specifications, quantity requirements with any volume scenarios, delivery location and schedule, quality and documentation requirements, payment terms, and response deadline. Incomplete RFQs generate questions and non-comparable responses.
Many organizations maintain RFQ templates for common purchase types, ensuring consistent information collection and making supplier responses easier to compare. Electronic sourcing platforms can streamline RFQ distribution, response collection, and analysis.
The RFQ process typically concludes with supplier selection, negotiation of final terms, and issuance of a purchase order referencing the RFQ response as the pricing basis.
Frequently asked questions
What is a request for quote?
A request for quote is a formal document soliciting pricing for clearly specified goods or services. The RFQ defines exactly what the buyer needs, including specifications, quantities, delivery requirements, and terms, and suppliers respond with price and conditions. RFQs are the workhorse of tactical procurement when requirements are well defined and price is the main evaluation criterion.
What should an RFQ include?
An effective RFQ includes complete technical specifications, quantity requirements with any volume scenarios, delivery location and schedule, quality and documentation requirements, payment terms, and a response deadline. Incomplete RFQs generate supplier questions and non-comparable responses, which slows the event and muddies the comparison.
When is an RFQ the wrong tool?
RFQs work best when the buyer can specify the need unambiguously, because clear specification enables direct comparison of responses. The more ambiguity in the requirements, the more appropriate an RFP becomes, since an RFP invites suppliers to propose how to meet the need rather than just price it.
What happens after RFQ responses come back?
The process typically concludes with supplier selection, negotiation of final terms, and a purchase order that references the RFQ response as the pricing basis. Many organizations keep RFQ templates for common purchase types, and electronic sourcing platforms can handle distribution, response collection, and analysis.
What does an RFQ look like for custom parts?
For machined or custom components, the RFQ package includes detailed drawings, material callouts, tolerances, finish requirements, and quality documentation needs, and often requests pricing at prototype and production volumes plus tooling charges, MOQs, and lead times. That level of detail is what lets quotes from different shops be compared on equal footing.