What Is Request for Quotation (RFQ)?
Also known as: RFQ, request for quote, RFP vs RFQ
Definition
A request for quotation (RFQ) is a document sent to several suppliers asking them to quote price, lead time and terms for specified items or services. The buyer compares the responses and awards one as a purchase order or contract.
Request for Quotation (RFQ) Explained
An RFQ is used when the buyer knows exactly what they want and needs the market to price it. It lists items or drawings, quantities, required dates and commercial terms, and is sent to a short list of qualified suppliers. It differs from an RFP, which asks suppliers to propose a solution, and from an RFI, which only gathers information.
In ERP the RFQ is the step between a requisition and a purchase order. SAP has RFQ creation in ME41, supplier quotation entry in ME47 and a price comparison report before awarding. NetSuite supports vendor request for quote with Advanced Procurement, and Odoo creates a request for quotation in the Purchase app that becomes a purchase order once confirmed. Many SyteLine and Infor LN sites run the RFQ outside the ERP in email or a portal and record only the winning price.
A good RFQ comparison goes beyond unit price. It covers tooling, minimum order quantity, lead time, payment terms, freight, currency and quality history. The winning quote is then stored as a price record or contract so later purchase orders pick it up automatically.
For repeat parts, the RFQ outcome often feeds a blanket order or price agreement rather than a single PO, which avoids rerunning the process every time.
Why It Matters
- Competitive quotes are the main lever buyers have to control spend on non-strategic parts.
- Capturing quotes in the ERP leaves an audit trail showing why a supplier was chosen.
- The awarded price becomes the default price on later purchase orders, which stops price drift.
- Comparing total landed cost, not just unit price, avoids choosing the cheapest quote that is expensive overall.
In Practice
A buyer sends an RFQ for 2,000 brackets to four suppliers. Quotes come back at 13.90, 14.20, 14.60 and 12.80 per piece, but the 12.80 supplier has a 12 week lead time and 5,000 minimum order. Once freight and carrying cost are added, the 14.20 quote with a 4 week lead time is cheaper for the real need, and that supplier gets the PO.
Frequently Asked Questions
What is the difference between an RFQ and an RFP?
An RFQ asks for a price on a clearly defined item. An RFP asks suppliers to propose how they would solve a problem, so evaluation covers approach and capability as well as price.
Does an RFQ commit the buyer to purchase?
No. An RFQ is a request for information on price and terms. The commitment starts only when the buyer issues a purchase order or signs a contract.
Can ERP manage RFQs or is a separate tool needed?
Many ERPs handle basic RFQs and quote comparison. Larger sourcing events with auctions or scoring often use a dedicated sourcing tool that posts the award back to the ERP.
Related Terms
Purchase Order (PO)
A purchase order (PO) is a document a buyer issues to a supplier committing to buy specified items or services at agreed quantities, prices and delivery dates. In ERP it drives receiving, invoice matching, open commitments and supply in MRP.
Purchase Requisition
A purchase requisition is an internal request to procure goods or services, routed for approval against budget and authority limits before a buyer sources it and converts it into a purchase order sent to a supplier.
Approved Vendor List (AVL)
An approved vendor list (AVL) is a controlled record of suppliers qualified to provide specific items, services or processes. Buyers may order only from listed sources, and changes require quality approval.
Landed Cost
Landed cost is the total cost of bringing purchased goods into inventory, combining the supplier price with freight, insurance, customs duty, tariffs, brokerage, and handling, so inventory is valued at what the material truly cost to acquire.
Blanket Purchase Order
A blanket purchase order is a standing agreement with a supplier to buy an item or group of items over a period, typically at a fixed price or up to a total value. Individual deliveries are called off through releases against it.
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China Supplier RFQ (Request for Quotation) Template
A fill-in RFQ document that makes Chinese suppliers quote on the same terms: volumes, Incoterm, VAT basis, tooling, quality and payment.
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Free tools
- China Supplier RFQ (Request for Quotation) TemplateA fill-in RFQ document that makes Chinese suppliers quote on the same terms: volumes, Incoterm, VAT basis, tooling, quality and payment.
- Manufacturing Quotation TemplateA fill-in quotation for custom parts with price breaks, tooling, lead time, assumptions and terms, ready to export as PDF or Word.
- Odoo Partner Request for Quotation TemplateA fill-in brief for asking Odoo implementation partners for a quote, covering company profile, modules, users, data, integrations and evaluation criteria.
ERP fixes and how-tos
- How to Write an RFP for ERP AIHow to write an RFP when AI is in scope: separate the ERP from the AI layer, define data, security and deployment constraints, and set testable acceptance criteria.
- ERP RFP Template with AI RequirementsAn ERP RFP requirements template with a ready AI section: data access, security, deployment, model governance, explainability, and commercial terms you can paste in.
Guides
- SyteLine Request for Quote (RFQ) Process ConfigurationConfigure the SyteLine RFQ process for competitive bidding. Set up request for quote workflows, vendor bid comparison, and auto-award rules in CloudSuite Industrial.
- EMS RFQ Turnaround Time: How to Quote Faster Without Losing MarginWhy EMS RFQ turnaround stretches to days and how contract electronics manufacturers cut it: triage, BOM prep, standard times, and AI assisted drafts.
- AI RFQ Review for Metal Stamping Suppliers: Read the Package, Flag the RiskHow AI can read stamping RFQ packages, extract print, volume, PPAP level and terms, flag risks and draft a quote for estimator review without exposing customer data.