Landed Cost from China: The Numbers Between Factory Price and Your Shelf

2026-09-26 · YIVAHUB Team

Every sourcing decision is a landed-cost decision. The unit price you negotiate is only the first line, and on bulky or fragile goods it is frequently not the largest one.

The lines that belong in the model. Factory price per unit. Domestic freight to the port. Export documentation and any certification. Ocean or air freight, allocated per unit by volume — not by value, which is the mistake that makes bulky products look cheap until they arrive. Insurance. Duty and any import processing fees. Broker charges. Inland delivery. And then the two lines most spreadsheets omit: a damage allowance, and the working capital cost of a deposit sitting in a factory for two months.

Volume decides freight, weight decides nothing. Lighting and furniture travel by cubic metre. A container that is only half full because the goods were lighter than expected is money spent on air. This is why the packing instruction matters commercially: knocked-down construction, nesting, and carton dimensions chosen for the container are worth more than a two per cent price cut.

Duty is determined by classification, not by description. A product's HS code decides the rate, and small specification differences change the code — a light fixture with a particular function, a furniture item with a particular material, a textile with a particular composition. Classification is worth doing properly once, in writing, with the paperwork to support it. What you must not do is let the supplier choose a cheaper code; that decision follows you for years and it is the importer — you — who answers for it.

The damage line is not pessimism. On glass, ceramics, lighting and furniture, a two to five per cent allowance is normal on first shipments and falls with experience. Budget it, and reduce it deliberately: better cartons, corner protection, palletising LCL cargo, and inspecting the loading rather than only the product.

Calculate cost per unit in the container that actually loads. Take the packed volume per SKU, the container's usable capacity, and build quantity sets that fill it. Compare scenarios at 40HQ, 20ft and LCL — the cheapest per-unit freight is not always the largest container if it means holding inventory you cannot sell. And model the exchange rate at a rate you would still be happy with, not today's spot rate.

Then compare suppliers properly. Ask for FOB plus the packed volume, and compute the landed cost yourself. A quote that is 4% higher on unit price but 15% denser per container is the cheaper supplier, and that is invisible in every spreadsheet that stops at the unit price. This is also the honest reason to work with an agent: the numbers that decide the answer sit outside the quotation.