Iris Glossary-Request for Quotation (RFQ)

What Is a Request for Quotation (RFQ)?

A Request for Quotation (RFQ) is a formal document that organizations use to solicit price quotes from vendors for specific goods or services.

RFQs are typically issued when product specifications, quantities, and delivery requirements are clearly defined—making price the primary factor in selecting a supplier.

Explore a full example in our blog: What Is an RFQ? Meaning, Use & Sample Template.

Purpose of an RFQ

The goal of an RFQ is to streamline procurement by allowing buyers to compare vendor pricing and terms for standardized needs.
RFQs are ideal for purchases that are transactional rather than strategic—such as office equipment, raw materials, or recurring supplies.

They help organizations:

Obtain competitive pricing through multiple bids.
Maintain transparency in supplier selection.
Create a standardized evaluation process for easy comparison.
Reduce procurement costs and time spent sourcing.

Learn how automation can simplify this process in Procurement Automation.

When to Use an RFQ

Use an RFQ when:

Product or service specifications are precisely defined.
Price is the main decision factor.
You need to compare similar offerings from multiple vendors.
The relationship is short-term or transactional.

Avoid using an RFQ for projects that require creativity, customization, or strategic alignment—these are better suited for a Request for Proposal (RFP).

RFQ vs. RFP vs. RFI

RFQ vs RFP vs RFI: Quick Comparison
Dimension	RFQ (Quotation)	RFP (Proposal)	RFI (Information)
Focus	Price for defined specs	Best overall solution	Market research
Complexity	Simple and transactional	Complex and strategic	Exploratory
Flexibility	Low — specs are fixed	High — vendors propose approaches	High — vendors educate
Evaluation	Based on cost and delivery	Based on value, expertise, and approach	Based on capabilities
Turnaround Time	Short	Long	Short

For a deeper breakdown, see our blog: RFQ vs RFP vs RFI: What’s the Difference?.

Key Elements of an RFQ Document

Introduction – A short overview of the project and company background.
Specifications – Detailed description of required goods or services.
Quantity & Delivery – Required quantities, timelines, and shipping details.
Submission Instructions – Guidelines on how and when vendors should submit bids.
Evaluation Criteria – How bids will be scored and compared.
Terms & Conditions – Payment terms, contract requirements, and legal details.

Download a sample layout in our post: What Is an RFQ? Meaning, Use & Sample Template.

Why RFQs Matter

A strong RFQ process ensures:

Cost efficiency: Encourages competition to secure better pricing.
Consistency: Creates a repeatable framework for future procurements.
Accountability: Provides documentation for audit trails and compliance.
Speed: Reduces time spent sourcing when specs are predefined.

RFQs also integrate seamlessly with Procurement Automation, allowing teams to send, track, and evaluate quotes automatically.

Best Practices for RFQ Management

Keep requirements clear and measurable.
Invite at least three vendors for competitive comparison.
Standardize your RFQ template format.
Follow up with vendors to clarify ambiguous details.
Use automation tools like Iris Pro to manage submissions and evaluations.

Related Glossary Terms

Looking for more RFQ guides?

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