The Landed Cost Guide
The price on a quotation is not the price on your shelf. Landed cost is the full cost of a unit delivered to your door — product, freight, insurance, duty and handling. Here’s how to think about it before you commit to an order.
FOB price vs. landed cost
Most quotations from China are FOB: the product price plus delivery to the origin port. Everything after that — ocean freight, insurance, destination charges, customs duty and local delivery — sits on top. Two quotes with identical FOB prices can land at very different real costs depending on carton size, weight and destination.
Comparing suppliers on FOB price alone is the classic beginner mistake. Compare on estimated landed cost per unit instead.
FOB vs CIF vs DDP
FOB — Free on Board
The seller delivers the goods onto the vessel at the origin port. You (or your forwarder) pay and manage ocean freight, insurance, destination charges and import duty.
Best for: Buyers with a freight forwarder or regular shipping volume.
CIF — Cost, Insurance & Freight
The seller arranges and pays ocean freight and minimum insurance to your destination port. You handle destination charges, customs clearance and duty.
Best for: Buyers who want freight handled but manage their own customs.
DDP — Delivered Duty Paid
The seller delivers to your address with duty and taxes handled. Simplest for you, usually the highest headline price.
Best for: Smaller shipments and buyers without logistics setups.
A worked example
Example only
- Product — $1.20 × 500 pcs
- $600
- Freight
- $180
- Insurance
- $12
- Estimated duty
- $20
- Estimated total
- $812
- Landed cost per unit
- $1.62
Example figures. Duty varies by HS code, origin, destination and trade agreements.
The $1.20 unit price became $1.62 on the shelf — a 35% difference. That gap is where margins live or die.
What decides your duty rate
- HS code — the product's customs classification sets the base duty rate
- Country of origin — trade measures can add or remove duties
- Destination — every market has its own rates, thresholds and taxes
- Trade agreements — preferential rates where an agreement applies
- Material — the same product in a different material can classify differently
We can suggest the likely HS classification for a product, but your customs broker has the final word — always confirm before committing to a price list.
Want a landed-cost estimate for your order?
Tell us the product, quantity and destination — we’ll quote FOB and help you model the rest.
Request a Quote