Requesting quotes on Alibaba

Alibaba's RFQ service allows customers to quickly and easily get quotes for almost any product - within a day or two. This can save you countless hours of work because you don't have to create your own shortlist and contact suppliers one by one. In this text, we explain what you need to know before sending an RFQ to Alibaba.com, but also how to correctly create a letter to an individual seller.

There are basically two ways to contact sellers. The first is that you choose the product and contact the sellers one by one with some unique letter that you will send to the selected sellers or that the sellers from Alibaba contact you based on your request.

Content

• Creating a request letter for a bid fee
• Preparation of RFQ for Alibaba
• RFQ process
• Common mistakes and misconceptions
• How do I know if my Alibaba RFQ was successful?
• RFQs outside of Alibaba.com

Writing a letter to a seller from China correctly

It should be said that not all sellers you write to will respond, especially if your letter is not well worded. However, in order to increase your chances of getting a response, it is necessary to correctly formulate the letter by which you contact them. Properly wording your letter can help you get the answers you're looking for. In every letter you need to be detailed and clear enough so that the seller understands you. Chinese manufacturers never give more information than is asked of them, so it is up to you to come up with the concept of your letter before you even think of contacting the suppliers. This, at least compared to the later stages, is the easy and fun part. See what an example of a properly worded letter looks like:

Of course, you are looking for quantities according to your needs. A letter formulated in this way is clear and precise enough for sellers to notice and understand you as a serious buyer. This increases your chances of the seller contacting you!

Even the most vague product search on the internet can result in hundreds of suppliers, which take days to contact them all! However, selecting and contacting all the suppliers that make it to your shortlist can take quite some time.

What if you could reverse the process and invite them to contact you? It's an idea created by Alibaba as part of its RFQ service.

How does the Alibaba RFQ service work?

Alibaba.com is the world's largest catalog of product suppliers. Basically, here you provide information about the product you are interested in and suppliers will provide you with offers based on your request.

How do I submit an Alibaba RFQ request?

First you need to go to rfq.alibaba.com. From here you can access the RFQ form and fill in the required fields:

• Product name
• Quantity (say 500 pcs)
• Specifications
• File attachments (say Design Files)
• Requested payment, shipping and other ordering conditions

After filling the form, just click submit RFQ. Alibaba then submits your request for quotation to the selected suppliers. Please note that the product offers you receive will be based on specifications.

In offers, you always get what you specify. If you do not include important specifications, such as materials, dimensions and other technical details - the offers you get may be useless. You should also be specific whether the supplier should quote based on your supplied design (OEM) or off-the-shelf products of their own brand.

Is it free to submit an RFQ?

Yes, Alibaba RFQ service is free to use. However, you can pay some small additional amount like 2-3usd and speed up the response process and increase the number of offers. This is still in the experimental phase of Alibaba and changes over time, so check with Alibaba if you are interested in more details if there is an RFQ payment.

Do all suppliers on Alibaba respond to your RFQ?

No, it is up to each supplier whether they want to bid through the RFQ service or not. Many suppliers do not respond to RFQ requests, while for some it is a core customer acquisition strategy.

Our recommendation is that you use the Alibaba RFQ service as one of your procurement strategies, not as the only method for researching suppliers and obtaining quotes. Actually, that's a good starting point for you. You get offers from sellers from Alibaba and then you ask us as an agent to try to find better, more favorable, cheaper.

What should you pay attention to when you receive an offer from an Alibaba seller?

You must be sure that the supplier has calculated the price of the product based on your specifications. Some suppliers quote "reference prices" that are not based on the specifications provided in your RFQ. Make sure and ask them to reconfirm all specifications by listing them in an additional email written only to them.

A summary of the basic things that should matter to you

• Specifications
• Price
• MOQ - minimum quantity you must order
• Price of making a sample

What is the next step?

It is still too early to decide on one supplier, and it is even worse to order the goods immediately. Instead, you should choose at least 2-3 suppliers with whom you are continuing the story and you should order samples from them. Why, because price won't matter if it turns out they can't make your product.

Additional checks

In addition, you should also perform additional vendor checks:

• Can they meet the standards of your market?
• Do they have some kind of quality management system?
• Do they have a social compliance certificate? Do they respect the employees' freedom of movement, do the employees have a regular salary, do they have health insurance, as well as whether there is and is safety and health at work respected, as well as compliance with local laws, etc.
• What is their registered capital?

Answers to many of these questions can be found by visiting their Alibaba page. Please note that Alibaba only allows verified suppliers to bid using their RFQ service - but it's up to you to decide if they're a good fit to work with.

Can Alibaba guarantee that I will receive high quality products?

Alibaba does not act as a guarantor of product quality in any capacity. Alibaba.com does not offer any form of insurance. Please note that Alibaba is only a marketplace. Alibaba does not act as a seller or exporter of products, so Alibaba does not monitor communications between buyers and suppliers. Gold suppliers, which are considered the best suppliers, only have to pass certain checks. For example, they must have a valid business license and be registered. Please know that it is solely your responsibility as the customer to create clear product specifications and then prepare and implement a quality assurance plan to identify and correct potential product quality defects.

Does Alibaba guarantee that only qualified suppliers will respond to RFQs?

As mentioned, Alibaba only verifies that Gold status suppliers are legally registered companies. However, this alone does not necessarily mean that the supplier is qualified to build your product well or meet your quality requirements. Alibaba cannot know the specific production capabilities and qualifications of each supplier. Therefore, it is up to the customer to determine whether the supplier is qualified or not. Please note thatAlibaba's RFQ service should only be your introduction to selecting a manufacturer.

Can the supplier increase prices after submitting the RFQ?

Yes, the supplier does not commit to the price they originally gave. In fact, price increases are inevitable as a result of material and transportation cost increases, wage increases, and currency exchange rate fluctuations. At best, the quoted price is valid for a month or two. Further, please note that the price quoted is only based on the information you provide when creating the RFQ on Alibaba.com. Don't be surprised if they give you higher prices later if you don't include important information about standards, materials, features or design.

How to I know I was offered a "good price"?

Assuming you have provided all relevant technical specifications, compliance requirements, quantity and Incoterms - you will probably get fairly accurate prices. However, one offer is not enough to determine the true market price. Instead, you must include at least 3 to 4 suppliers in your RFQ decision process. Assuming you are looking for a specific product such as electronics, baby products or food contact materials, you will only include those suppliers who can meet the required market standards.

Offers with a price below average

As mentioned before, be prepared to receive at least one or two offers that are above or below average. In most cases, the lowest price can be explained by one or more of the following reasons:

1. The product is not based on your specifications
2. The supplier has quoted a price based on a higher quantity than its competitors
3. The supplier has quoted an EXW price

Product prices on Alibaba

We often get questions from clients about whether to trust the prices that suppliers post on Alibaba. Our answer is almost always NO.

As this article explains, price doesn't matter if you don't know what it's based on. In addition, the price ranges set by suppliers on Alibaba tend to be very wide - far wider than the actual price range, which is largely based on order quantity.

The problem is not Alibaba, but the suppliers themselves because they don't take it seriously - because they work according to OEM principles.

Prices of materials and components may change weekly. Updating prices for hundreds of ODM products is too time-consuming for the average manufacturer. However, the names of cheaper suppliers on Alibaba are on average no better or worse than other suppliers.

Should I give my target price when we ask for an offer?

Yes, feel free to state your target price, but only after careful consideration. The unit price must be based on previous research data, for example, related product offers or outdated offers - or, based on your own margin calculations. Manufacturers have little room to cut prices, so don't expect them to become generous simply because you give them an unrealistically low target price.

That's not a smart tactic.

You achieve nothing by setting an artificially low target price, except by disqualifying qualified suppliers. In the end, you always get what you pay for, and your business is always better off if you focus on increasing profit margins rather than killing a few cents per unit price by lowering product quality.

We hope we have helped you at least a little in this area. If you have additional questions or think we can help you, you can always write to our email.