What is RFQ? What are the usage scenarios of RFQ?

What is RFQ?

RFQ means Request for Quotation in written form. This word often appears in foreign trade correspondence. When a buyer sends an inquiry to a seller, it may be in the form of an email or fax. The word RFQ will appear in the header of the fax document or the subject of the email.

An RFQ can be a virtual offer or a real offer. Often after the seller makes an offer, the buyer will make a counter-offer. If it is a real offer, the buyer and seller will finally settle on a price that they both agree on, and the transaction is completed.

In international trade, transactions all start with RFQ and are gradually concluded. Foreign trade salesmen should not only provide simple quotation for RFQ, but also be good at using various techniques to induce customers, so as to turn each RFQ into a real offer and finally sign a contract and order. RFQ has a certain confidentiality in business negotiations.

What are the usage scenarios of RFQ?

RFQs are often used when products and services are standard or readily available, so that companies can more easily compare quotes. A company typically requests quotes when it knows the quantity of a product it wants to buy. For example, a government agency that wants to buy 500 computers with a specific hard drive size and processing speed posts an RFQ. Since the product is standard, the agency can easily compare different quotes.

An RFQ is usually sent to several potential suppliers, asking bidders for pricing. It may contain information that the bid must include, payment terms, factors that determine which bid the company selects, and the bid deadline. The RFQ focuses primarily on pricing. If the minimum criteria are met, the supplier with the lowest bid is usually awarded.

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