You found a great FOB quote — $4.20 a unit. Then the container landed and your real cost was $5.49. That 31% gap is not bad luck. It is the difference between a factory price and your landed cost from China: the full money you spend to move goods from a Chinese factory into your own warehouse, ready to sell.
Most importers lose margin before they ship, because they compare FOB numbers and forget what sits underneath. Comparing factory prices without a full landed cost build-up hides the real number. If your quote comparison stops at "FOB price × quantity," you are usually ignoring 20%–45% of the real cost.
Solution Skill — Build a one-row landed-cost sheet.
Open a spreadsheet: one row per cost line, one column per supplier quote. Fill every cell — unit price, freight, duty, VAT, broker, drayage, bank fees — even if it is an estimate flagged red. The moment two quotes sit side by side on landed cost, the "cheap" factory often flips. Never compare FOB. Compare landed.
Ocean and air rates look cheap until BAF, low-sulphur, peak-season, and congestion fees stack on top. A low base rate carrying four undeclared surcharges is not a low rate. Ask your forwarder for an all-in number with the surcharge list attached.
Coverage runs 0.1%–0.5% of CIF value, but a minimum premium always applies. On a $40,000 shipment that is $40–$200 — cheap protection against goods you cannot replace before your selling season.
Your HS code (8–10 digits: HTS in the US, TARIC in the EU) sets the rate. Two visually identical products can sit two percentage points apart because of material content or function. Duty is charged on customs value, and the base differs: CIF for the EU and UK, FOB for the US, Canada, and Australia. Get the base wrong and the whole model is off.
EU 19% (DE), UK 20%, Australia 10%, Canada 5%+. If you are VAT/GST registered, this is recoverable — track it as cash flow, not cost. Duty is never recoverable. Mixing the two hides your real margin.
Terminal handling, customs broker entry ($50–$150 per entry), and ISF/AMS/ENS filing where required. Small lines, easy to forget, always present.
Trucking from port to warehouse, chassis and pre-pull fees, driver wait time. Slow release burns free time (usually 4–7 days) and demurrage charges kick in fast.
Every payment carries wire fees and a foreign-exchange spread — often 1%–3% of the transfer. On a $50,000 order that is $500–$1,500 quietly gone before the goods move.
One 40HQ, 6,000 units, FOB Shenzhen $4.20, 6.5% duty, to Hamburg:
FOB said $4.20. Landed says $5.49. Add roughly $5,689 of import VAT on top as recoverable cash.
What is included in landed cost but not the FOB price?
Freight, insurance, import duty, VAT/GST, terminal handling, broker fees, drayage, demurrage risk, and bank charges. FOB only moves goods to the Chinese loading port.
How do I calculate total import cost from China?
Add product cost, origin charges, freight, insurance, duty and taxes, destination handling, last-mile delivery, and finance costs, then divide by units shipped. Use your market's customs base: CIF for the EU and UK, FOB for the US, Canada, and Australia.
Which single mistake costs importers the most?
Ignoring cubic dimensions. Freight is charged on volume, and carton fill rate decides FCL cost per unit. A supplier with a slightly higher price but tighter cartons often wins.
Build the sheet once, reuse it forever. Keep freight as a formula driven by CBM or container count, store duty rates beside HS codes, and add a 3%–5% contingency line. After two or three shipments your estimates should land within a few percent, and you will finally know your true margin before you buy.
Factories · Freight · Customs · Payment — all handled. Need help? Contact Linkyourfactory, your China supply-chain partner.
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