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LARS GROUP
Costing

How to work out the full landed cost of goods from China

Factory, freight, inspection, fees — and the costs people forget most often.

Проверено

The price a factory quotes is what the goods cost in the factory’s own warehouse. Getting them to yours costs noticeably more, and the gap is almost never within ten per cent. Calculating your margin from the price list is the most common and most expensive mistake of a first shipment.

What the total is made of

  1. 1The maker’s unit price at your volume — not at the volume printed in the listing.
  2. 2Domestic freight inside China: factory to consolidation warehouse.
  3. 3Consolidation, repacking and marking, if there is more than one supplier.
  4. 4Batch inspection — sampling before the goods ship.
  5. 5International freight along the chosen route.
  6. 6Customs duties and certification in the destination country.
  7. 7Transfer fees and losses on currency conversion.
  8. 8Project handling.
CarefulThe last two are forgotten most often. On a run of a thousand units, conversion losses and transfer fees easily eat several per cent of margin — which is precisely the amount people haggle over with the factory.

The second thing worth computing straight away is how the total moves with volume. Freight and inspection barely depend on the number of units: they are spread across the batch. So the cost per unit on a run of three thousand can come out a fifth lower than on a thousand, at the very same factory price.

TipBefore haggling over one yuan a unit, price two volume scenarios. The difference between them is usually larger than anything negotiation can win you.

The calculator on the home page covers the first five items and says so plainly. It deliberately leaves out duties and certification: those depend on the product category and the destination country, and any figure without them would be invented — and someone would buy on the strength of it.

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Costing

Payment schedule, fees and the full landed cost per unit.