RFQ vs. RFP: What’s the Difference?

Have you ever shopped online, compared prices, and read reviews until you knew you made the right decision?

This is similar to when companies need to buy something, only it’s a slightly more formal process.

In the business world, the process involves vendors or companies submitting RFPs (request for quotation) or RFQs (request for quotation) so that you can compare their products and services.

These documents help companies decide which vendor to buy from. It’s similar when we, as consumers, shop online and look at prices and reviews to compare new phones, for example.

Below, we’ll cover everything you need to know about RFQs – from what they are, how to write one, to how they differ from an RFP.

In a request, you can find a vendor’s cost, payment terms, and product specifications or details. Most businesses use an inquiry when they know exactly what they are looking for, what budget to spend, and are ready to make a purchase.

If you know what kind of features you want to see, you plan on choosing a provider based on price, and you don’t need a service plan or supported contract, a request might be the right one for you. Having a number of inquiries will help you evaluate all of the solutions quickly and correctly priced.

So what is the difference between a request and a request?

While an RFP contains more detailed information about the service itself, an RFQ mainly answers the cost. A request implies that this is an easy on-demand purchase as opposed to a longer term project that has a longer buying process.

Now you might be wondering what that looks like in action. Let’s check below.

1. Preparation

If you as a company want to use a request, you first have to decide whether you want to open the bid for a provider or select a selected group of providers.

If you want to send RFQs to multiple vendors, you need to decide which vendors you want to send the RFQ template to. You can make this decision based on reputation or the people you’ve worked with previously.

If you want the quote to be open to all vendors, you can use procurement software to make this process easier. This will publish the RFQ document on your website, vendors will be able to upload it, ask questions, etc. Plus, everything will stay with the RFQs in one place, easy to review and contact any vendors you say no to (more on that later).

You then need to create the RFQ document (see template below). This should include a list of requirements, including a list of products (required features), quantity or duration, delivery date, and payment terms. If you don’t use a standard template, companies may give you different information and you won’t be able to compare apples to apples.

Ideally, you have also attached an introduction to your company, what you will need, the deadline for submitting it, and how to submit it. Introducing the problem you want to solve will help salespeople know if this is a good fit.

When it’s time as a vendor to fill out a request, you need to look at the template that was sent to you and collect all of the information. How much do these products cost? Is it in the correct currency? Did you provide your contact information? As a seller, your job is now done unless you are naturally selected.

2. Check

After submitting your RFQ documents to your supplier list, you will need to wait until the deadline. When you get the requests back, you can review them. Which company gave you the best price? Which company can offer all the products / services you need?

This process is easier if you used a standard template and asked everyone for the same information. Once this has been thought through and you have included all the necessary details in the template, this process should be quick.

3. Select and close

Once you have made up your mind, you can either email the decision to everyone or use the software above to send out notifications and notify vendors who have submitted a request.

It is recommended that you wait to notify the vendors that have not been selected until the one you selected signs the contract and the deal is closed.

If you tell the vendors that they weren’t selected, thank them for their time. It is important that when choosing a provider, you don’t burn bridges with the other providers as you may need to use these in the future.

RFQ template

Below is a list of information that you can request in an inquiry. You can divide the document into buyer information, seller information, and review and rating.

Buyer information

• Name of the company
• Company description
• Product details and goals
• Contact information – name, title, phone, email address of the contact person

Seller Information

• Product details – name and technical data
• Product quantity
• delivery terms
• Product price

Review and evaluation

• Valuation method
• Timeline
• Terms and Conditions
• Submission requirements and instructions

If your business is choosing between multiple vendors, you know what you want, and price really matters, then an inquiry might be the way to go.