Why three?
One quote tells you a price. Two tell you there is a difference. Three give a rough picture of the market and make it harder for a single supplier to set the price. It is a rule of thumb, not a law for private companies; each company sets its own purchasing policy.
Set a threshold
Collecting three quotes for a box of gloves wastes more time than it saves. Pick an amount above which three quotes are expected, and let small purchases go through with one.
Compare more than the price
| Compare | Why it matters |
|---|---|
| Total amount | The obvious one, on the same quantities |
| Lead time | A cheaper part that arrives after a shutdown costs more |
| Payment terms | Affects cash flow |
| Notes | Warranty, brand, delivery and exclusions |
Write down the reason
Choosing a more expensive quote is often right. The problem is when nobody can later say why. Ask for a short reason whenever the selected quote is not the lowest, and keep it with the approval.
Example
| Supplier | Amount (RM) | Lead time | |
|---|---|---|---|
| Supplier A | 1,308.00 | 5 days | Selected |
| Supplier B | 1,236.00 | 14 days | Lowest |
| Supplier C | 1,350.00 | 7 days |
Reason recorded: "Supplier B can't deliver before the line shutdown." Fictional figures.
How the Avantix Procurement Portal handles quotes
In a Quotation Approval, the requester enters the selected quote and the other quotes received. Approvers see them side by side with the lowest highlighted and the difference against it. A reason is required when a cheaper quote was not chosen, and requests above a set amount (RM 2,000 by default) with fewer than three quotes are flagged. See vendor quote comparison.