Request for Quote increases your chances of winning any project. Generally, RFQ is written by the buyer to quote his price. There is a standard format that should be followed for the successful RFQ Here is the definition, procedure, and importance of RFQ.
What do you mean by RFQ?
RFQ stands for Request for Quote. RFQ meaning is - a process that any client or organization used to buy a specific product or tender. The client prefers the lowest and the potential bid for their project. It gives a chance to all the vendors to quote their price for a particular product they are seeking.
Few things you should consider when choosing a vendor:
- ● Specifications of the product or project the vendor wants to buy.
- ● Bidder should mention the cost of each item so you can compare it.
- ● Project submission deadline.
- ● A timeline of delivering products on different dates
Keep in mind that a quote’s request is merely a quote and not a formal agreement. After selecting the final bidder, you make a formal agreement for the vendor. RFQ also stands for Request for Qualifications. You can use requests for qualifications to check whether the vendors can meet your requirements. It’s the best way of screening their skills for your contract.
Difference between RFP and RFQ
Many clients and contractors get confused between RFP, RFQ, and RFI. But all the RFx has different meanings and purposes.
- ● RFP - Request for proposal. It is a project proposal written by any client who wants to outsource the help for the specific project completion. It has details about the project.
- ● RFQ - Request for Quote. The RFQ is written when you want to buy any product or service at the best price. It consists of the price quotation. RFP is to ask clients to tell the solution for any business problem and RFQ states the price required for the solution.
Procedure to Write RFQ
It is quite easy to write a potential request for a quote, as the bidder knows what he wants to buy from the contractor. There are numerous software tools like SaaS (software as a service) companies and e-sources to help you with RFQ designing. If you don’t know how to write an attractive RFQ, you can outsource the services for it.
Guide To RFQ
Invest your time and resources to prepare the best and most approachable bid. Do intense research on how to quote price, the standard format, and more. Be clear with your requirements and terms & conditions. A straightforward quotation helps you to win the contract.
Include the following things while writing RFQ:
- ● Details - pars, products, and additional requirements
- ● Delivery time and type
- ● Quantity
- ● Payment terms and method
- ● Timeline and feedback process
- ● Submission requirements
Submission and Management
After preparing the RFQ, send it to your clients. However, give them enough time to get the response for your RFQ. Meanwhile, do research and be ready for the questionnaire of the company.
You can check out the history of the relatable project for better understanding. Your RFQ should be approachable enough and different from others. Don’t include all the details in the RFQ itself. . Let the client come to you to discuss further. There might be a chance of negotiation and better opportunities.
After examining all the RFQ of bidders, the client will compare and probably go for the lowest bid. You can add templates to make your bid more impactful.
However, the RFQ makes it easy for both parties to understand each other's requirements. As, the RFQ has terms and conditions, quoted price, payment method, deadline, and delivery.
There might be some changes done after the negotiation but almost the deal will be the same. Always, announce the name of the winning bidder, and don’t forget to thank other bidders for their contribution. You might need other bidders for future projects. Always treat them ethically.
- 1. Introduction - Give a brief introduction about your company. It should be short and to the point. Write it after completing RFQ.
- 2. Overview of your Services - Mention how your services will help the client to meet their requirements.
- 3. Price Template - You can create a price template for each part. Mention the price required for every product. It will help the bidder to understand your quotation.
- 4. Questionnaire -Include a questionnaire to know more about your client and its requirements. You can include questions like:
- ● Describe the Product Development process
- ● What are your terms and conditions?
- ● What is your current asset to liability ratio?
- ● Product schematic
- ● Description of different parts
- ● Quantity
- ● Technical needs
- ● Quality
- ● Delivery method
- ● Payment terms
- ● Tender length
- ● Warranty
- ● Performance penalties
- ● Incentives if any
- ● Renewal option
Response To the RFQ
The primary purpose of RFQ is to provide the pricing and payment quotation to the clients. You need to assure of fulfilling few conditions like:
- ● The project will be delivered on time
- ● Changes will be done
- ● You have experience in the same sector
Your RFQ leads you towards new opportunities. Even if you don’t get this tender, your RFQ will open the doors to new opportunities. Consider these things while writing a response:
- ● Read the RFQ. Follow all the guidelines and address all the questions with thoughtfulness.
- ● Before writing, check out the client’s background.
- ● Take your time to write the response but submit it before the deadline.
- ● Write in professional form and follow standard format
However, if you want to win a tender write a compelling RFQ to beat the competition. You can find online templates, standard format, and examples of RFQ for all types of tenders. Tenders Pedia has all the information you need to win a bid.