Why request for quotation (RFQ) matters to a first-time founder
An RFQ can expose market pricing and make a straightforward purchase faster, but only when every supplier prices the same requirement. Missing quantities, delivery terms or service levels create misleading comparisons. Founders should include total-cost factors and avoid inviting bidders merely to pressure a preferred supplier’s existing price.
Examples of request for quotation (RFQ)
A café chain requests quotations for 30 identical refrigerators, delivered to three named sites by 1 June, with a two-year warranty. Four suppliers quote unit price, delivery, installation and payment terms. The cheapest unit price loses because its installation fee and slower delivery make the compliant total offer more expensive.
Common misunderstanding
An RFQ is not an RFP. An RFQ suits a settled specification and focuses on commercial terms; an RFP invites suppliers to propose how to meet a broader need. A quotation may also become legally significant when accepted, so labels alone do not determine whether a contract has formed.
When to use it
Use one after confirming what quantity, quality, timetable and contractual terms you need. Send the same information to each credible supplier, set a realistic deadline and record the comparison. Seek procurement or legal advice where public-sector rules, sanctions, conflicts of interest or a high-value commitment require a formal process.