How to run an RFQ, step by step
A practical guide to the request for quotation, from the first line item to the purchase order, with a template you can copy.
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In short
To run an RFQ (request for quotation), define exactly what you need line by line, with quantities, specifications and delivery details; invite three to five suitable suppliers; send everyone the same request with a clear deadline and quote format; answer questions to all suppliers at once; compare quotes on total cost, lead time and terms rather than unit price alone; negotiate where it is justified; then award, issue a purchase order and tell the other suppliers.
What an RFQ is
A request for quotation (RFQ) asks suppliers to price a defined list of goods or services. Every supplier gets the same request and returns prices in the same format, so you can compare them fairly and choose on evidence rather than on who replied first.
| Request | Use it when | Judged on |
|---|---|---|
| RFI (request for information) | You are still learning what the market offers | Capability and fit |
| RFQ (request for quotation) | You know exactly what you need | Price, lead time and terms |
| RFP (request for proposal) | You need suppliers to propose an approach | Solution, experience and price |
1. Define the need
Most RFQ problems start here. If suppliers have to guess, they price the guess, and the quotes cannot be compared. Write down:
- Each line item, with a clear description, unit of measure and quantity. “500 boxes of 50” and “25,000 pieces” are the same order, but they produce very different quotes if you are not clear.
- Specifications: size, material, finish, brand or equivalent, colours and certifications. Attach drawings, artwork or photos.
- Delivery: the address or branches, the date, and whether you need installation or unloading.
- Budget, for your own reference. It tells you later whether the award needs extra approval.
2. Choose who to invite
Invite three to five suppliers who can actually deliver: the right licence and category, delivery to your locations, and capacity for the volume. A good mix is one or two current suppliers who know your standards, plus one or two new ones to test the market. If your list is thin, see how to find suppliers in the UAE, and check any new supplier before you order.
3. Write the RFQ
A clear RFQ fits on a page or two. It should say:
- Who you are, and who to contact with questions.
- The line items, quantities and specifications from step 1.
- The delivery location, date and any installation.
- The deadline, with the date, time and time zone.
- The quote format: unit price per line, delivery and other charges, lead time, how long the quote is valid, and payment terms.
- Whether prices should include or exclude VAT. In the UAE, asking for prices before 5% VAT, with VAT shown separately, keeps comparisons clean.
- How you will choose: on price alone, or on price with lead time, quality and track record.
- Any terms suppliers must accept, such as keeping your designs confidential.
4. Send it and manage questions
Send the same RFQ to every supplier at the same time. When a supplier asks a question, answer it in writing and share the answer with all invited suppliers, without naming who asked. If the answer changes the scope, extend the deadline for everyone.
Send a reminder halfway through and again shortly before the deadline. Most missing quotes are forgotten, not declined.
5. Compare the quotes
Put every quote into one table, line by line, in the same unit and VAT treatment. Add delivery, installation and other charges to get the total cost, then look at lead time, validity and payment terms. The lowest unit price is often not the best value. Our guide on how to compare supplier quotes fairly works through an example.
Check, too, whether splitting the award by line beats giving everything to one supplier. Sometimes it does, once delivery charges are counted.
6. Negotiate
Negotiate on facts. If a supplier you would like to use is well above the best price on a line, tell them they are not competitive on that line and ask for their best price, or propose a specific figure based on the quotes you have. Apply the same rules to every supplier and keep it to one round where you can. Endless rounds teach suppliers to pad their first price.
7. Award and order
- Get approval if the award is over the budget or above your approval limit.
- Award the supplier, or suppliers, and issue a purchase order that repeats the agreed lines, prices, delivery date and terms.
- Tell the unsuccessful suppliers promptly. A one-line reason, such as price or lead time, helps them quote better next time.
- Keep the record: the request, every quote, any counter-offers, the approval and the award. It answers questions from finance or auditors months later, and gives you a baseline for the next RFQ.
An RFQ template
Copy and adapt:
Request for quotation: [what you are buying]
From: [company], contact [name, email, phone]
RFQ reference: [number]
Quotes due: [date, time and time zone]
Items
1. [Description and specification], [quantity] [unit]
2. [Description and specification], [quantity] [unit]
Delivery: [address or branches], by [date]. [Installation needed or not needed.]
Please quote: unit price per line excluding VAT, VAT shown separately, delivery and any other charges, lead time, quote validity and payment terms. Mark any line you cannot supply.
How we will choose: [total cost, lead time, quality, track record].
Terms: [confidentiality, samples, other conditions].
Common mistakes
- Vague lines. “Cleaning supplies” invites five different interpretations.
- No common format. Comparing a PDF, a photo of a price list and a voice note takes longer than the RFQ itself.
- Deadlines that are too short. You get fewer quotes and higher prices.
- Answering questions privately. One supplier gets an advantage, and the others notice.
- Choosing on unit price alone. Delivery, lead time and partial quotes change the picture.
- Silence after the award. Suppliers who never hear back stop quoting.
Procurement software takes care of most of this. In Korrway, suppliers quote line by line from a link with nothing to install, reminders go out before the deadline, late quotes are blocked, every quote lines up in one comparison with the best single-supplier and split awards worked out, and counter-offers are suggested from the best price on each line.
Questions
How many suppliers should I invite to an RFQ?
Three to five suits most purchases. Fewer than three gives you little competition. More than six or seven adds work for you and lowers each supplier's chance of winning, so some will not bother to quote.
How long should an RFQ stay open?
Long enough for a careful quote. A few working days suits standard items; custom, printed or imported items often need one to two weeks, especially when samples are involved. A deadline that is too short gets you fewer and higher quotes.
Can I negotiate after an RFQ?
Yes, as long as you treat suppliers fairly: use the same rules for everyone, base any counter-offer on real quotes, and avoid endless rounds. One focused round of counter-offers is common.
What is the difference between an RFI, an RFQ and an RFP?
An RFI (request for information) asks suppliers what they can do. An RFQ asks for prices on a clearly defined list of items. An RFP (request for proposal) asks suppliers to propose a solution when the requirement is less fixed, and is judged on more than price.
Is an RFQ legally binding?
Usually not on its own. A quote is generally an offer, and a contract forms when the buyer accepts it, often by issuing a purchase order on agreed terms. The details depend on your terms and the law that applies, so take legal advice for large or unusual purchases.
See how Korrway works
One place for sourcing, RFQs, approvals, orders and deliveries, with AI agents doing the chasing.