Prepare Your Request for Quote (RFQ)
You have now assessed your needs, you have defined your priorities, and you have explored location of production benefits and limitations. At this point it is time to prepare your request for quote. To start, gather all of the information that you will include in your RFQ and that you will want to share with prospective suppliers (see note below on intellectual property): product photos, critical specifications, packaging requirements, branding, color schemes, certifications, delivery terms, required lead times, required payment terms, product liability insurance requirements, customs requirements, special markings, etc. If you have a spec (or data) sheet for the product, you can attach this to the RFQ. The same would hold true for a bill of materials as well.
We strongly suggest building a template that you will use for all RFQs. The benefits of a template are numerous, but mostly it will standardize this stage of the sourcing process, helping you to ensure that your requests are comprehensive and consistent. You are going to need to check back all quotes received against your RFQ, making it easier if the relevant information is noted in the same place on all requests.
Quantities will obviously affect the pricing you receive. Therefore, it is imperative that you provide the prospective suppliers with your anticipated purchase quantities. We favor breaking this down as a first order quantity and ongoing order quantities (this could be expressed as weekly, monthly, quarterly, or annual volumes, depending on the frequency of your anticipated orders). Make sure to request that the supplier also offer you their minimum order quantities (MOQs).
[custom_frame_left shadow=”on”][/custom_frame_left] We highly recommend that you also specify a timeline – when you need the quotes returned and when you will be determining the winning bid. You may also wish to share your priorities with your prospective suppliers as well – i.e. how you will evaluate the quotes you receive.
Finally, include a list of contacts that will be available to clarify any questions regarding the RFQ. It is not uncommon to have separate contacts for specific disciplines; for example, one contact for technical questions and another for marketing questions. Your supplier should know how to respond and to whom they should send their final quote.
For additional information, please refer to our white paper, How to Structure an Effective Request For Quote.
A note on intellectual property rights (IPR) in China: Even though China has strengthened its legal framework and IPR laws and regulations as required by its entry into the WTO, it continues to be a haven for pirates and counterfeiters. It still boasts one of the highest piracy rates in the world. If it sells well, it is likely to be illegally copied. While China is a party to international agreements to protect intellectual property (including WIPO, Bern Convention, Paris Convention, among others), companies must still register its patents and trademarks with the appropriate Chinese agencies and authorities for those rights to be enforceable in China. Copyrights do not need to be registered but registration may be helpful in enforcement actions. As a result, if you are looking to manufacture a new, innovative or unique product in China and are concerned about piracy, then we highly suggest you seek professional assistance before sending out your RFQs to a bunch of factories (sight unseen). There are plenty of companies, Sertus included, that can help you to manage your RFQ process, while protecting your rights by putting you in a legally sound position before you share your intellectual property as part of the sourcing process.