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An RFQ, short for request for quotation, is a formal document a buyer sends to suppliers asking for price quotes on standardized goods or services. Suppliers reply with pricing, delivery terms, and other commercial conditions, and the buyer compares the quotes and awards the order. Use it when you know exactly what you need.
What is an RFQ in procurement?
An RFQ in procurement is a formal request for quotation: you describe exactly what you want to buy, and each supplier replies with a price and commercial terms. Some teams write it as "request for quote," and the meaning is the same.
An RFQ helps procurement teams collect comparable quotes from several suppliers and pick the option with the best overall commercial terms, not just the lowest price.
Buyers commonly use RFQs for bulk raw materials, components, equipment, standard office supplies, and routine replacement parts. In each case, suppliers don't need to propose a solution. They only need to price the one you described, which makes the replies easy to compare. The RFQ is one of the tools inside the wider sourcing activity we cover in our sourcing vs. procurement guide.
A quote is not a commitment on your side. Nothing binds you to a supplier until you issue a purchase order and the supplier accepts it.
RFQ, RFP, or RFI: which one should you send?
Send an RFQ when you know exactly what you need and want the best price. Send an RFP when you need suppliers to propose a solution. Send an RFI when you are still learning what is out there. Each document answers a different question, and picking the wrong one wastes everyone's time.
An RFQ fits when your specifications, quantity, and quality standards are clearly defined. Here is a simple test: if two suppliers could meet your spec in exactly the same way, send an RFQ. If they would meet it in different ways, send an RFP.
An RFQ also works well for tail spend, the long list of small, repeatable purchases where a quick round of competitive bidding on price beats a long vendor evaluation.
Skip the RFQ in three cases:
- Unsettled specs: suppliers quote different things, and you end up comparing apples to oranges.
- Fit over price: quality, service, or capability matters more than cost, so an RFP serves you better.
- Tiny purchases: the effort of collecting quotes costs more than the saving.
How the RFQ process works, step by step
The RFQ process runs in six steps, from writing the request to telling the suppliers who did not win. Most of the work happens in step one, because a vague RFQ gets vague quotes.
- Prepare the RFQ: The buyer writes the specs, quantity, delivery date, payment terms, and evaluation criteria.
- Build the supplier list: Choose three to five qualified suppliers, including your current one if you have one.
- Send the RFQ: Issue it to every supplier at the same time, with the same deadline and the same questions.
- Receive and analyze the quotes: Compare every reply on the same basis, as the next sections show.
- Select the winner: The buyer recommends a supplier, and the right approver signs off based on the spend.
- Close out: Issue the purchase order to the winner and tell the other suppliers they were not selected.
The roles stay simple. A buyer or purchasing agent runs the process, a procurement officer or budget holder approves the award, and finance sees the PO.
What an RFQ actually looks like: a sample
A good RFQ fits on one page and leaves nothing for the supplier to guess. Every RFQ covers six key parts:
- Item specifications: exact product details, dimensions, technical requirements, and quality standards
- Quantity: the number of units or the volume required
- Delivery requirements: the delivery date, location, and shipping needs
- Payment terms: how and when the supplier gets paid
- Submission deadline: the date and time quotes are due
- Pricing requirements: the price format, plus discounts, taxes, shipping, and other charges
Here is how those parts look filled in for a standard laptop purchase. The names, figures, and dates are illustrative, not real data.
Three fields do most of the work. The pricing format forces every supplier to itemize fees, so the quotes compare cleanly in the next section. The evaluation criteria tell suppliers how you will decide, so they quote accordingly.
The validity window protects you from a price that changes before you finish approving the spend. If you are searching for an RFQ template, copy these fields. They cover the payment terms and contract terms most buyers need to compare.
How to compare quotes without just picking the lowest price
Compare quotes on total cost, not unit price. The cheapest quote often loses once you add fees, delivery time, and payment terms. Here is the comparison for the laptop RFQ above, again with illustrative figures.
Supplier C has the lowest unit price at $1,150. It also adds $2,400 in fees, delivers after your deadline, and carries a 1-year warranty. Supplier A wins on total cost at $48,100 and meets every requirement.
Supplier B costs $1,500 more than Supplier A, but it offers Net 45 payment terms. If cash timing matters, that may be worth part of the premium. Most teams would not pay all of it. Total cost of ownership works the same way: the price, plus everything else the purchase costs you.
After you pick a winner: from quote to purchase order
The RFQ ends at the award. Once you pick a supplier, the winning quote becomes a purchase order, and everything after that follows your normal procure-to-pay workflow.
- Approval: The award goes to whoever is authorized at that spend level. A purchase this size may need a procurement officer or finance to sign off.
- Purchase order: Issue a PO that matches the quote: the same price, quantity, delivery date, and payment terms. Reference the RFQ number on it. If the buy started as a purchase requisition, the PO carries that reference too, the same link our requisition vs. purchase order guide describes.
- Receipt and invoice: When the goods arrive and the invoice follows, the three-way match compares the PO, the receipt, and the invoice before payment releases. Our 3-way matching guide walks through it.
Skip the quotes and the approval, and you get maverick spend: purchases nobody compared or approved. Even a fast RFQ leaves a record of who was asked, what they offered, and why you chose the winner.
Where Spendflo fits around the RFQ
Spendflo does not replace the quote. Flo handles what surrounds it: the request that starts the buy, the check on whether a quote is fair, the approval, the PO, and the invoice match.
Flo Procure handles the buy from intake to completed purchase, including vendor onboarding, approvals, and PO creation. When a software quote arrives, Flo reads it and checks it against your existing contracts and benchmark pricing, then flags a quote that sits above the market median so your team negotiates before approving, not after. That quote review is built for software and SaaS purchases.
After the award, Flo routes the approval, creates the PO, and Flo AP matches the invoice against the PO and the agreed rate. Your team sees only the exceptions.
Frequently asked questions about RFQs in procurement
1. What is an RFQ in procurement?
An RFQ is how a buyer collects comparable price offers for something it has already fully specified. The buyer sends the same requirements to several suppliers, and each one answers with its price, delivery terms, and conditions, so the options line up side by side.
2. What does RFQ stand for in procurement?
RFQ stands for request for quotation, also written as request for quote. A buyer sends exact specs to suppliers and asks each one for a price.
3. What is the difference between an RFQ and an RFP?
An RFQ asks for a price on a fixed spec. An RFP asks suppliers to propose a solution and a price. Use an RFQ when price decides the outcome, and an RFP when the approach does.
4. What is the difference between an RFQ, an RFP, and an RFI?
An RFI gathers general information from suppliers when you are still exploring. An RFQ requests a price on a defined spec. An RFP requests a full proposal when the solution is open.
5. When should you use an RFQ?
Use an RFQ when the specifications, quantity, and quality standards are clearly defined, the item or service is standardized, and the goal is to compare supplier pricing and commercial terms. It suits one-off purchases within tail spend.
6. What is an RFQ commonly used to buy?
Standardized goods and services with fixed requirements, such as bulk raw materials, components, equipment, standard office supplies, and routine replacement parts.
7. What should an RFQ include?
Six key parts: item specifications, quantity, delivery requirements, payment terms, a submission deadline, and pricing requirements such as price format, discounts, taxes, and shipping. Many buyers also add the quote validity period and the evaluation criteria.
8. Is a supplier's quote legally binding?
A quote is generally an offer from the supplier. It typically becomes binding once you accept it, usually by issuing a purchase order. Terms and validity windows vary, so check with legal on large purchases.
9. What happens after you choose the winning quote?
You issue a purchase order that references the quote, receive the goods, and run a three-way match of the PO, the receipt, and the invoice before paying.
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