How to Request a Quote?
Small and large businesses purchase services and materials from a variety of suppliers, and they typically will request a quote for those services and materials, especially if the supplier is new to them. There are many other reasons for issuing a request for a quote which we will cover in this post, along with how to write the quote request and some of the most frequently asked questions.
Requesting a quote can be a simple, straightforward document, or it can be much more detailed, covering not only quantity and price. The quote request also may ask for warranty services, support services, volume discounts, delivery requirements, and detailed specifications about the products delivered. A quote request is an excellent communication method between the supplier and the purchaser to minimize the potential for misunderstanding and to obtain the best overall price.
When to request a quote?
A request for a quotation can be sent by email, other electronic methods, or even the old fashion way; however, regular mail has fallen out of popularity recently. The reasons or situations that may cause a buyer to make a request for a quote include the following:
- Requesting details from a business about the prices of their products and services
- Comparing competitive pricing from several suppliers
- Buyers may need quotations to assist in the preparation of budgets for a project
- Requesting volume discounts, specific requirements, and detailed specifications
- Warranty and customer support
- Shipment details and charges, if any
- Understanding payment requirements for transactions, e.g., payment due dates
- Understanding the legal terms associated with the transaction
- Understanding the financial terms of the transaction. e.g., late payments
- Many specialized requirements depending on the nature of the businesses involved, the products, and the services
How to write an email requesting a quote?
Writing an email requesting a quote can be straightforward or complex, depending on the details requested in the quote. The request for a quote or RFQ can be in the body of the email or be included as a separate word document or PDF attached to the email. When using attachments, most companies will use PDF documents to maintain the integrity of their requests. Each quote request will be numbered and dated to distinguish between other RFQs or changes to the original RFQ.
Whether the RFQ is embedded in the email or as an attachment, the general format remains the same. The following outlines the steps required to prepare an RFQ:
Subject Line – should be easily identifiable and clear about your intentions. Terms such as
- Reference Number
- Company initials
Are often included in the subject line to provide clear email tracking and identification of the intention of the RFQ.
Opening paragraph – should contain a polite, professional business greeting indicating the name of the person the RFQ is emailed to. If the person is unknown, use the department name and set a friendly tone, using the words, Good Morning.
Detailed paragraphs – will outline the details of the request. Listing the items, description, and model numbers of the items you are interested in, why these items are being requested and the quantities needed. Using a bullet list or table with a bullet or line for each item indicates you need a quote for each item on your list.
Additional details – may be outlined in subsequent paragraphs. Typical requests or details include the following:
- Response date to your RFQ
- Date products or services are needed
- Detailed specifications, if not already covered in previous paragraphs
- Delivery location
- Warranty requirements
- Payment details and schedule
- Additional questions you may have
- Include your contact information for any follow-up questions
Closing paragraph – should be professional and business-like; indicate a response date or timeline request if you need an answer within a specified time frame. End the paragraph thanking the supplier in advance for their response, and include your full name, email, and phone number. Note: Suppliers often spend a great deal of time responding to RFQs. Keep your RFQs professional and reasonable. Your suppliers will appreciate the effort.
Things to keep in mind when requesting a quote
As you write your RFQ, keep in mind the following:
- Be professional – use a formal writing approach, be polite in all of your correspondence in the RFQ, emails, and subsequent communications about the RFQ
- State A Response Date – that provides reasonable time for suppliers to prepare a response but also meets your needs for information to help you make decisions.
- Request Delivery Schedules – particularly for large volume orders that may be shipped to several locations. A staged delivery over several weeks or months may be satisfactory and preferable compared to receiving everything at the same time.
- Check delivery fees – shipping and delivery fees may be included in the price or separately. It is best to know in advance that you may be asked to pay these fees. These fees can add up quickly and cause a supplier’s response to be uncompetitive.
- Confirm payment terms – 30 days, 60 days? Late payment fees, advance payments, delivery charges, etc., should all be confirmed to ensure that you meet your own cash flow needs and the expectations of the supplier.
- Negotiate – once you have a response from the supplier, be prepared to negotiate. There is always room to modify terms, conditions, and prices to gain a better deal and still meet the supplier’s goals. Aim for a win-win scenario for both parties.
Quote Request Template
Most companies will develop their request for quote templates, particularly if they routinely issue RFQs for goods and services. A template can save a great deal of time, ensure accuracy and establish a common look and feel to your RFQs. Templates help to maintain a positive professional business impression of your company.
The following template is a simple, straightforward template that can be used and modified to meet your personal needs for an RFQ with a supplier you have not conducted business with previously:
[Subject line – RFQ#-XXX – Your Name]
Dear [Supplier name]
Hello, I am [Your name], [Title], [Company Name]. I am in charge of procuring [equipment, product, or services] for my company. The following is a request for a quote for the following [equipment, products, or services]:
1 [Item description, model number, and quantity required]
2 [Item description, model number, and quantity required]
3[Item description, model number, and quantity required]
4 [Services required]
5 [Services required]
Associated with the [products, services], we have the following questions that should be addressed in your response:
Note: your questions can be quite wide-ranging; however, they may cover – warranty, service, payment requirements, and other terms and conditions.
The [equipment, products, or services] should be delivered to [Shipping address to receive the products] on or before [Date].
Please provide your response to this RFQ by [Date]. Please feel free to contact me by email or phone to discuss any questions about the RFQ and your response.
I look forward to your response
Request for Quote Template (Word, Excel, PDF, Google Docs, and Sheets)
The following are several frequently asked questions many business owners have:
Your company may have guidelines on when to use an RFQ, e.g., a specific dollar value or quantity of product. New suppliers that you wish to explore and comparing responses from several suppliers regarding prices, schedules, and support levels are reasons why you would want to use this approach.
Open bid responses are opened in front of everyone, with all information available to vendors. Sealed bids are opened by the buyer in private and evaluated by the buyer before determining a winner.
Invited bids are sent to suppliers on the company’s list of trusted suppliers. There is a risk of missing more competitive suppliers.
In most cases, the answer is yes. Preparation of the quote request may be time-consuming for the buyer and also the supplier. The buyer must also confirm budget is available to acquire the goods and make commitments to the supplier.
For many quotes, price and warranty are the main criteria. However, there are many more variables that can be considered when evaluating a response. An example of a few of these include:
ᐅ Delivery fees
ᐅ Payment terms
ᐅ Delivery schedules
ᐅ Features and technical specifications
ᐅ Additional selection criteria specific to the industry and the products or services
Buyers preparing a request for a quote should always keep them professional and in business-like formats. All correspondence concerning responses, questions, and orders should follow this same approach to ensure a positive opinion of your company and foster continued business relations.
Buyers can request to quote directly in the body of an email, or they can create the quote, save it in PDF format and attach the PDF file to an email for transmittal to the supplier. A PDF is a great way to ensure that the content of the quote request remains unchanged.
Always ensure that a clear description of what is needed, along with exact quantities and delivery dates, are included in the request. This is the minimum requirement; however, there are many more terms and conditions that may be included depending on the product and relationships between buyer and supplier. For example, there may be a master agreement that covers all of the terms and conditions, allowing managers to request a quote in a simple email.
The response date the buyer is looking for should always be included. The date makes it clear when you need a response and establishes a deadline for the supplier to meet.
Payment terms and conditions should be captured in the response or a master agreement between the buyer and seller. The RFQ may define the terms and conditions needed for a successful purchase agreement.
The RFQ and the response are excellent methods to communicate and avoid assumptions by either party. Assumptions can lead to misunderstandings and legal difficulties. It is always professional to make any issues that are a concern for either party clear in the RFQ and the response to the RFQ to avoid mistakes and misunderstandings.