Request for Quotation

What is Request for Quotation?

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).

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.

When is Request for Quotation usually used?

Request for Quotation is usually used in this situation: when the products and services are standard or in stock, the company in need can more easily compare quotes. When a company knows the quantity of the product it wants to buy, it usually asks for a quote.

For example, a government agency that wants to buy 500 computers with a specific hard drive size and processing speed announces a Request for Quotation. Since the product is uniform, the agency can easily compare different quotes. An Request for Quotation is usually sent to several potential suppliers, asking bidders for pricing. It may contain the information that the bid must include, payment terms, factors that determine which bid the company chooses, and the bid deadline. The Request for Quotation focuses primarily on pricing. If the minimum criteria are met, the supplier with the lowest bid is usually awarded.

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