A letter of intent (LOI) outlines the terms of a deal and serves as an “agreement to agree” between two parties. When a relationship between the parties is not established yet, a letter of intent always help to generate some confidence in the minds of the seller about the buyer.
The LOI should be on the buyer’s letterhead and include Company details, Product details, Incoterms and payment method preferences.
The letter should also clearly indicate the reason of purchase, why is Buyer interested in the product and the flexibility of negotiations. This certainly saves time and resources of both the involved parties.
There are two main reasons for requesting a LOI.
1. To collect all the information necessary from which you can accurately get a quote from any supplier.
2. To establish confidence in the supplier’s mind that the buyer is authorized and serious about the request.
The below sample letter of intent to purchase template provides DatumSourcing with the information an authorization to search for the best supplier for the buyer. It will have to be edited to include the details of a particular purchase. It is only a reference.