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Business to business letter giving estimate of costs

This letter is one of the basic forms of correspondence for most businesses, and a good format will make it more readable and easier to compose.

The most important thing about any estimate is that it addresses all information requested by the client.

It's advisable to itemize a quote or estimate, so the costs are obvious, and the client can see that everything's been included.

A quote can be considered a commitment to a price for legal purposes.

That means you need to give accurate figures.

At this stage, you're also probably competing with other quotes.

That can actually be a positive element in your own quote. If you give a good, well presented quote, you can use the quote as a selling point to your client.

Basic estimates:

The estimate consists of

  • Itemized prices for goods and / or services.
  • Discounts were applicable.
  • Warranties where applicable.
  • A time frame for delivery.
  • Additional materials in relation to your estimate

Competitive estimates

The basic estimates will be the same, but the Additional materials part can be very different.

Some businesses will provide a lot of additional materials as a sales pitch.

It's not a bad idea, either, because your client can see your work first hand.

Below is an example of a software company's estimate to a major retail client. Note the use of headings as itemization. As you can see, they haven't left much to chance, in terms of providing additional information and materials.

Example

Addressee

Your Reference
Our Reference
Contacts

Dear

Estimate for new Red Rose software packages

I'm pleased to give our estimate of costs for our new Red Rose software packages as requested. We've included some information regarding our support packages and online materials, so you can see the full Red Rose suite of software.

Unit costs (per 100 units, minimum order quantity):

Red Rose Graphic Master    $100
Red Rose High Definition Media   $120
Red Rose Sound Studio    $110
Red Rose Animator   $140
Red Rose Media File Converter   $ 75
Red Rose Database   $110
Red Rose Gold package   $450

(Note: The Red Rose Gold package is all the other packages combined.)

Discounts:

Per 200 units:    5%
Per 500 units:    10%
Per 1000 units:   20%

Warranties

Unlimited unconditional refunds / replacement on any defective packages.

Support information

Free customer service support for all our trade clients
Online and phone technical support for all users
Upgrades free to users with all Red Rose software

Additional materials enclosed / attached for your consideration:

  • 5 Red Rose Gold packages for evaluation
  • Copies of industry reviews of the Red Rose software
  • Industry sales figures showing Red Rose market share

Our Red Rose packages have been achieving high sales nationally, and we can honestly say that we're having to work hard to keep up with demand.

We're happy to discuss any questions you may have about our products, and to provide any additional information you need.

Yours sincerely

Signed
Title
Date

Disclaimer

Please note:

  • This text is intended for advisory and guideline purposes only.
  • Any business letter can become a legal document, so check your content properly before issuing.
  • Any executable or statutorily defined document should be checked for compliance with legal requirements, and you should seek legal advice regarding its contents.