The supplier’s unit price is only one part of what inventory costs when it reaches your warehouse or customer. Landed cost brings the major purchasing, preparation and logistics expenses into one comparable figure.
A practical landed-cost formula
Landed cost = product cost + setup and packaging + China-side handling + international freight + insurance + duties and taxes + destination charges + inspection and compliance costs.
The exact treatment of tax and recoverable VAT depends on your destination and business structure. Use a qualified customs or tax adviser for formal classification and liability decisions.
Product and setup costs
Include the quoted unit price, mould or tooling fees, logo setup, custom packaging, labels, inserts and sample development. Spread one-time costs across the order quantity when comparing unit economics, but keep them visible for cash-flow planning.
China-side costs
Domestic freight, warehouse receiving, consolidation, export cartons, inspection and export handling can be material—especially when combining several factories. Ask whether the quotation is EXW, FOB or another Incoterm because that determines where cost and risk transfer.
Freight depends on packed dimensions
Air and express shipments are frequently charged by the greater of actual or volumetric weight. Ocean freight includes more than the base freight rate; origin and destination handling, documentation and delivery can change the total. Obtain final carton quantity, dimensions and gross weight before treating a freight estimate as reliable.
Duties, taxes and compliance
Customs classification, origin and destination-country rules determine the applicable charges. Product testing, safety labelling, batteries, liquids or restricted materials can add cost or limit routes. Confirm requirements before production rather than after goods are ready.
Compare scenarios, not one number
- Calculate a test-order scenario and a scaled-order scenario.
- Compare express, air and sea options where practical.
- Add a reasonable contingency for early-stage products.
- Include fulfilment and returns if evaluating direct-to-consumer margin.
- Update the model when final packing data becomes available.
Our packaging and fulfillment support can be considered alongside product sourcing. Share your quantity and destination through the sourcing request form to structure an initial comparison.
Need a clearer supplier comparison?
Share a product link, image or short brief. Our China-based sourcing team can help organize the next steps for review.