Request for quotation (RFQ)

A request for quotation asks suppliers to price a defined requirement. It normally specifies products, quantities, delivery needs and other terms so the buyer can compare offers on a consistent basis.

An RFQ works best when the buyer can specify the requirement clearly enough for suppliers to price comparable offers. Relevant details can include product codes, quality specifications, packaging, destination, required dates and payment terms. A very low unit price may be less attractive once delivery, minimum quantities or lead times are considered.

For example, a retailer requesting quotes for 500 identical display stands could send the same drawing and delivery requirement to three manufacturers. A supplier quotation provides the response. Where the supplier must also design the solution or propose a service approach, a request for proposal may be more appropriate.