Request for Quotation (RFQ): Everything Procurement Teams Need to Know
- Robert
- Sep 17
- 5 min read
Table of contents:
Here's a podcast summary to go along with the article if you don't have time to read it all:
Procurement teams often face the same challenge: how do you get the best possible pricing while making sure suppliers meet your exact requirements? That’s where the Request for Quotation (RFQ) comes in.
An RFQ is one of the most widely used tools in procurement because it drives price transparency, creates healthy competition among suppliers, and helps organizations make well-informed purchasing decisions. In this guide, you’ll learn:
What an RFQ is and why it matters
The full RFQ process step by step
RFQ vs RFP: how to tell them apart
The role of RFQ software in modern procurement
Benefits and challenges of RFQs
Practical tips for implementing RFQs effectively
Let’s break it down.
What is a Request for Quotation (RFQ)?
A Request for Quotation (RFQ) is a formal document organizations use to invite suppliers to submit bids for standardized products or services. Unlike broader sourcing documents such as Requests for Information (RFIs) or Requests for Proposal (RFPs), an RFQ is laser-focused on price and terms for clearly defined needs.
Think of it this way: if you already know exactly what you need (the product specs, service details, or quantities), an RFQ is the quickest way to benchmark costs and select the most competitive supplier.
RFQs are most common in situations such as:
Buying commodities or standardized goods (e.g., office supplies, construction materials, IT hardware).
Services where the scope is clearly defined (e.g., cleaning, transportation, printing).
When cost competitiveness is the main factor in supplier selection.
Why RFQs are Important in Procurement
RFQs play a central role in ensuring procurement delivers both savings and value. For one, they bring transparency into the buying process; suppliers know they’re competing on the same terms. This naturally pushes pricing closer to the real market rate.
They also help procurement teams work more efficiently. Instead of dealing with long proposals, you get straightforward, comparable responses. That makes evaluation faster and reduces the chance of miscommunication.
And perhaps most importantly, RFQs establish fairness and consistency. Every supplier gets the same information. No hidden advantages, no favoritism. That fairness builds trust and encourages suppliers to keep engaging with your organization over time.
The RFQ Process Step by Step
While it’s tempting to think of RFQs as just “sending out a form,” there’s a process behind them that determines how effective they’ll be. Here’s how it usually unfolds:
1. Preparation and requirements: This is the foundation. Take the time to define exactly what you need - specifications, quantities, and delivery schedules. The more clarity you provide now, the fewer surprises you’ll have later.
2. Issuing and management: Distribute the RFQ to your shortlisted suppliers. Best practice is to keep this list limited (around 6–8 vendors) so that competition stays sharp without overwhelming your team during evaluation.
3. Scoring and selection: Once the responses are in, evaluate them side by side. With a standardized RFQ template or software, you can easily compare not only prices but also delivery terms and warranty conditions.
4. Closing and contracting: Remember: a supplier’s quote is not yet a contract. Use this stage to negotiate any gaps, then finalize an agreement that reflects the agreed price, conditions, and deliverables.
5. Review and evaluation: Don’t let the process stop at awarding the contract. Capture lessons learned, hold an initial supplier performance review, and set the tone for a collaborative relationship.
RFQ vs RFP: Key Differences
It’s easy to confuse RFQs with RFPs, but they serve different purposes. RFQs are about price for defined needs, while RFPs are about solutions for broader challenges.
Think of RFQs as transactional and RFPs as strategic. Both have their place, but they aren’t interchangeable.
What is RFQ Software?
Managing RFQs through spreadsheets and email threads can work - until it doesn’t. Data gets lost, suppliers miss deadlines, and comparing quotes becomes a headache. That’s why many procurement teams have shifted to RFQ management software.
An online RFQ platform allows you to create, distribute, and evaluate RFQs entirely online. Instead of juggling files, everything is stored in a central hub that buyers and suppliers can access in real time.
Imagine preparing a request directly in your browser or smartphone, sending it to pre-qualified suppliers, and watching the responses roll in - all standardized, neatly organized, and ready for side-by-side comparison. That’s the kind of efficiency modern RFQ software provides.
The real advantage? Flexibility. Teams can issue RFQs from anywhere, and suppliers can respond without wrestling with complicated formats. This reduces back-and-forth emails and gives procurement professionals more time to focus on analysis instead of admin.
When to Use RFQ Software
Not every purchase needs a full-blown RFP process. RFQs are ideal when time is limited and requirements are clear. For example:
You have a list of prequalified suppliers who can deliver a specific product or service.
Price is the deciding factor, rather than methodology or innovation.
You’re buying standardized or out-of-the-box products (hardware, office supplies, logistics services).
You know exactly what you need and the exact quantity.
Your team can manage the product or service internally without extra supplier support.
In these cases, RFQ software makes the process faster, more transparent, and easier to track.
Main Benefits of RFQs
RFQs provide both short-term and long-term advantages:
They make it easier to compare prices side by side and avoid paying above market rate.
They simplify supplier selection, since vendors know exactly what’s expected of them.
They streamline the buying process by removing ambiguity and documenting requirements.
They improve communication, because suppliers receive structured, professional requests instead of vague emails.
They strengthen supplier relationships by showing fairness and professionalism.
And of course, they usually result in better pricing because suppliers are competing directly for the same business.
Common Challenges in RFQs (and How to Avoid Them)
Request for Quotations (RFQs) play a vital role in procurement, yet they come with their own set of challenges. Even experienced teams can stumble into some common issues that reduce the effectiveness of the process. For instance:
Incomplete requirements leave suppliers guessing and make their quotes useless.
Inviting too many suppliers overwhelms evaluators and lowers supplier engagement.
Focusing only on price risks sacrificing quality, reliability, or service.
Failing to follow up wastes the effort put into collecting quotes.
Avoiding these mistakes requires discipline; especially in the preparation stage and in how you evaluate offers.
How to Implement an RFQ Solution
Rolling out an RFQ process across your organization isn’t just about sending forms. It’s about embedding a system that works consistently. Here’s how:
Analyze your current situation – assess supplier performance, process gaps, and improvement opportunities.
Start with a pilot project – test RFQs in one category before rolling them out widely.
Assign ownership – designate a procurement manager or team to oversee the process.
Refine and expand – build templates, train suppliers, and gradually expand usage.
When done right, RFQs become not just a way to collect prices, but a repeatable process that strengthens procurement efficiency.
How Prokuria Helps with RFQs
This is where technology makes all the difference. At Prokuria, we’ve designed our RFQ management software to remove complexity and give procurement teams back their time. With our platform, 84% of customers launch their first RFQ within a week.
Some of the features our clients rely on include:
Supplier Engagement Monitor to see participation in real time
Sealed Bids to guarantee fairness and transparency
Audit Logs to track every change
Powerful Questionnaires that go beyond price (file uploads, conditional questions, etc.)
Internal Collaboration Tools to align stakeholders
Smart Alerts & Reminders to keep suppliers on schedule
Easy Supplier Access through a secure link (no complicated setup required)
The result? Faster sourcing, sharper pricing, and stronger supplier partnerships - without drowning in spreadsheets.
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