What is an RFQ (Request for Proposal)? How to Prepare One in B2B Trade?

An RFQ (Request for Quotation) is a document prepared by a buyer to formally request a quote from suppliers for a specific product or service, including price, delivery time, and terms. In B2B trade, RFQs are the standard way to compare suppliers and start negotiations with a clear foundation.

When to use an RFQ?

• When you want to compare prices from multiple suppliers
• When product specifications are clear but price/delivery terms are uncertain
• When conducting a preliminary assessment before establishing a regular or large-volume supply relationship.

How to Write an Effective RFQ?

1. Product/service description : Technical specifications, quality standards, and packaging requirements must be clearly stated.
2. Quantity : The quantity requested for the order (and any potential for future repeat orders) should be specified.
3. Delivery term (Incoterms) : The desired delivery term (such as FOB or CIF) should be clearly stated.
4. Delivery time : Expected production and shipping time should be specified.
5. Payment terms : The preferred payment method should be specified, such as letter of credit, cash payment, or deferred payment.
6. Offer validity period : The supplier should be asked to specify how long the offer will be valid for.

The Difference Between RFQ and PO (Purchase Order)

An RFQ (Request for Information) is a request for information/price process that does not yet involve a commitment to order. A PO (Purchase Order) is the document issued after the offer is accepted, formally confirming the order. Therefore, the process generally proceeds as RFQ → offer evaluation → PO.

Common Mistakes When Preparing RFQs

• Leaving technical specifications incomplete or unclear leads to receiving different and incomparable offers from suppliers.
• Not specifying the delivery method (Incoterms) makes it unclear what the prices actually cover.
• Focusing solely on price and not asking about criteria like delivery time and quality guarantee.

Frequently Asked Questions

Is sending an RFQ a commitment to purchase? No, an RFQ is only a request for price and terms; the commitment occurs when the offer is accepted and a PO (order form) is issued.

How many suppliers is ideal to receive responses from in an RFQ? While there's no general rule, it's common practice to obtain quotes from at least three suppliers for a healthy comparison.

Are RFQ and RFP (Request for Proposal) the same thing? No. RFQs generally request a price for a clearly defined product; RFPs, on the other hand, are used in more complex projects that also require a proposed solution.

Why might suppliers not respond to an RFQ? A response might not be received if the requested quantity is below the supplier's MOQ, the product is outside the supplier's area of expertise, or the request is not clear enough.

How long does the RFQ process take? It varies depending on the complexity of the product and the number of suppliers; it can take a few days for simple products and several weeks for products requiring custom manufacturing.

This content was prepared by the GoTradeGo team. If you would like support from an international trade expert in preparing RFQs or comparing suppliers, you can find relevant profiles on gotradego.com .