I am getting some quotes for a buyer, and most of the suppliers keep asking for LOI (letter of interest), What is this? Should this come from my customer? Or should it come from me? What does it suppose to say in it? I am afraid that if it comes from the customer the supplier will get to know the customer before any agreement is signed, what should I do?

How can I make sure that I can get the suppliers their LOI, and keep my self safe and make a commision at the end.

Thanks,

Replying To  [RookieTrader]:

Usually a LOI is issued for items like coal, iron ore and other large quantity items. It is purely a letter stating that you are interested and intend to purchase XYZ etc.

I would suggest you can always get one addressed to YOU from the Buyer, and then YOU issue one on your letterhead to the seller. After all, The Seller sells to you (therefore you become the buyer), then you sell to the end Buyer, thus you becoming the seller and he becomes the buyer. Two seperate transactions.

Once the deal goes down, the Buyer issues a transferable LC to you, and you transfer it to the Seller, thus getting your commission in between.

Replying to [RookieTrader]:

LOI is also known as Letter of Interest, Letter of Intent or Letter of Intend and as Grigo rightly said it is for bulk quantities and high value items like iron ore, petroleum products, coal, sugar, rice etc. LOI is a committment or an agreement issued on your company's letter agreeing to sell or buy the products accordingly to the specs, quantities, delivery schedule, price and other terms stipulated in the LOI. Your customer need not issue the LOI to the original supplier. Your customer will issue the LOI in your name and you issue another LOI to your supplier. If you do not know the format or the contents you can ask for a draft copy from the supplier and issue the LOI after filling all the details.

Once the deal is finalised, a transferable LC will be issued by the buyer in your name and you transfer the LC in your suppliers name and pocket the difference which is your commission.

Replying to all
i think grigio is right. I was making some mistakes , i would like to know the contents of letter of intrest . does this secure the deal

Replying to [mama bebe]:It does secure your interest once certain clauses/terms are added/agreed/mentioned/discussed and must be signed by both parties. The contents must be on a official company letter head.When sending the LOI to the party in question it must be forwarded in PDF format and also via registered mail/courier (two original copies one to be retained and other to be send back) this avoids the chances of the contents being changed on the said document.

Replying to [grigo]:I am also new at this.Thank you for this information. I did not have clue.

Replying to [Buddhu]:

Thanks for the response, What if my buyers wants a Fully funded non-transferable L/C, then I will have to get a LOI issued for my supplier to the my buyer correct?

How do I get my commision? DO I make the supplier pay me? How do I full fil the suppliers request of an LOI? They are requireing that it be on buyers letterhead.

Replying to [Tell me why]:Could you please contact me via trade manger please or else see my profile mamabebe

Replying to [Tell me why]:Could you please contact me via trade manger please or else see my profile mamabebe

Replying to [RookieTrader]:
As far as my knowledge is concerned LOI is letter of indent , which explains who you are, what business you deal in what you want to buy or sell.

Replying to [Tell me why]:should the LOI must be signed and stammped on every page???or at the end of the document??i received many LOI which are just stamped by the companies at the last page but not on everypage??it is correct or wrong??however it is issued on the official letter head of the company/...