Learn how to estimate landed cost for China imports using product value, freight, insurance, duty, customs fees, and local delivery.
Landed cost formula for small importers
Landed cost is the estimated total cost of getting goods from a supplier to your final receiving point. The basic formula is: product cost + packaging or sample cost + inland cost in China + international freight + insurance + import duty + customs or brokerage fees + local delivery. The exact formula changes by country and shipment method, but the habit is the same: compare the full cost, not only the supplier unit price.
When buying from China, pay close attention to whether the quote is EXW, FOB, CIF, DAP, or DDP. An EXW price may look cheap because it leaves more freight and export handling work on the buyer. A DDP price may look convenient but can hide weak cost visibility. Ask suppliers and freight forwarders to separate goods value, carton data, port fees, freight, duty assumptions, and delivery charges.
Practical example
A supplier quotes 1,000 units at $4.20 each, FOB Ningbo. Product value is $4,200. Ocean freight and destination charges are estimated at $850, insurance at $35, duty at 6%, customs broker fee at $120, and local delivery at $180. Your rough landed cost is product value plus all these items. If the final total is $5,637, the landed cost per unit is about $5.64, not $4.20.
Common mistakes
- Comparing EXW and FOB quotes as if they include the same services.
- Forgetting destination port, customs broker, and local delivery charges.
- Using duty rate guesses without checking HS code assumptions.
- Ignoring carton volume and weight until after the supplier confirms packaging.
- Treating a freight quote as final when it is only an estimate.
Checklist
- Confirm Incoterm and named place.
- Collect unit price, MOQ, carton size, gross weight, and quantity.
- Estimate freight, insurance, duty, customs fees, and local delivery.
- Compare landed cost per unit across supplier quotes.
- Save assumptions so you can update them after real quotes arrive.
Numbers you should collect before calculating
Before you use a landed cost calculator, collect the numbers in separate lines instead of mixing them into one supplier message. You need product unit price, order quantity, sample cost if it will be absorbed into the order, packaging upgrade cost, inland freight in China if the term is EXW, export handling fees, international freight, insurance, import duty rate, customs broker fee, destination port or terminal charges, and local delivery.
The most common mistake is using a single freight quote without knowing what it includes. Ask whether the quote includes origin charges, destination charges, documentation, customs clearance, duty, taxes, and delivery to your warehouse. If the answer is vague, keep the quote as an estimate and do not treat the landed cost as final.
How to compare two landed cost scenarios
Build one table for each supplier and keep the same cost categories. Supplier A may have a lower unit price but higher MOQ and worse carton efficiency. Supplier B may charge more per unit but ship in smaller cartons, offer FOB terms, and provide clearer documents. The better supplier is the one with the better full landed cost, clearer risk profile, and stronger ability to deliver the product correctly.
For small importers, cash flow matters as much as cost. A higher MOQ can make the per-unit price look attractive while locking too much money into inventory. Add a note for deposit amount, balance timing, lead time, and inspection cost before choosing the quote.
Related tools
This guide is for educational planning only. Confirm customs, tax, legal, compliance, inspection, shipping, and commercial decisions with qualified professionals and written supplier documents.