Comparison Shopping as a Business

June 18, 2021 by First Federal Bank

comparision shoppingDoes your business need products or services from an outside provider? To get the best quality for the best price, you’ll most likely want to circulate a request for information (RFI), a request for proposal (RFP), or a request for quote (RFQ). These documents are essentially the business-world version of comparison shopping. Using them the right way will help you gather facts about what you need and find the vendors that best match your requirements and your budget.

What is an RFI?

If you’re in the beginning stages of determining what your business needs and educating yourself on what vendors have to offer you, an RFI can help prepare you for next steps. This can be especially helpful if you’re seeking a service or product for the first time and don’t have a clear picture of what’s available to you. At this point, you’re not yet inquiring about prices — you’re collecting general information on whether vendors can fulfill your needs.

According to Training Industry, an RFI document should be as specific and focused as possible. Be clear about what your business is looking for, what kind of information you want vendors to submit, and how they should go about submitting it. This will help you avoid confusion and get potential business relationships off to a good start.

What is an RFP?

If you have more clarity about what your business needs, you may be ready to issue an RFP. This document will help you compare vendors, provide you with valuable information, and allow vendors to bid for your business. Your RFP should contain detailed information about the products or services you’re seeking; your expectations for timing, implementation, and quality; and the process vendors should follow to submit their proposals.

Investopedia’s Will Kenton notes it’s important to maintain a balance when designing an RFP. You’ll want to keep the requirements focused so they prompt vendors to suggest appropriate products and services. At the same time, it’s wise to maintain flexibility so vendors have the opportunity to suggest innovative solutions that may not have occurred to you.

What is an RFQ?

If you already know precisely what your business wants to buy and are focused only on the finances, an RFQ might be right for you. While an RFP can include pricing information, it also requests information and helps you assess a variety of factors. HubSpot’s, Rebecca Riserbato writes an RFQ narrows this down considerably, focusing only on the price of the product or service you’re seeking. This way, you can quickly compare bids and get what you need.

RFI, RFP, and RFQ solicitation

Wherever you are in the shopping process, you can circulate your RFI, RFP, or RFQ in a wide variety of ways. Depending on what you need, you can send them directly to vendors you want to do business with, submit them to industry journals or other publications, or work through an intermediary organization in your vendor’s line of business. Riserbato notes you can also use procurement software to accept bids via your company’s website.

As your business seeks out the best services or products for the best price, RFIs, RFPs, and RFQs will be valuable items in your toolbox. Using these resources wisely can help you make better purchasing decisions and have a positive impact on your business

Categories: Small Business, Entrepreneurship

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