The factory quote is not your cost
A supplier in Ningbo quotes $15 per unit FOB. You multiply by 1,000, budget $15,000, and set a retail price. Weeks later the freight forwarder, the customs broker, and the trucking company all send invoices, and the real number turns out to be closer to $22 per unit.
That gap is what this article covers. The factory price is rarely what kills margins. The costs around it do.
Landed cost is the only number worth budgeting
Landed cost is everything you pay to get the goods into your warehouse, divided by the number of sellable units.
It includes the product, freight, insurance, duty, customs fees, port charges, inland delivery, and any inspection or rework. It does not include the cost of a shipment that arrives late or wrong, but you should budget for that too, because on a first order it happens more often than people expect.
The full cost stack, line by line
| Cost line | Typical range | Who charges it |
|---|---|---|
| Product (FOB unit price x quantity) | Your quote | Factory |
| Samples and courier | $50–$300 | Factory + DHL/FedEx |
| Tooling or molds (custom products) | $500–$15,000+ | Factory |
| Factory audit, first time | $300–$800 | Third-party agency |
| Pre-shipment inspection | $100–$300 per man-day | Third-party agency |
| China inland freight and export clearance | Usually inside FOB | Factory or forwarder |
| Ocean freight, FCL 20ft | $1,500–$6,000+ | Freight forwarder |
| Ocean freight, LCL | $80–$180 per CBM plus fees | Freight forwarder |
| Air freight | $4–$9 per kg | Freight forwarder |
| Marine insurance | 0.3%–0.6% of value | Insurer |
| US import duty | 0%–50%+ depending on HTS | US Customs |
| Section 301 and additional tariffs | 0%–25%+ on many goods | US Customs |
| Merchandise Processing Fee | 0.3464% of value (min ~$33, max ~$635) | US Customs |
| Harbor Maintenance Fee | 0.125% of value, ocean only | US Customs |
| Customs broker plus ISF filing | $100–$250 | Broker |
| Customs bond | ~$60 single entry / $400–$700 annual | Surety |
| Port fees, chassis, drayage | $300–$900 | Terminal and trucker |
| Delivery to warehouse | $150–$800 | Trucker |
| Retail or Amazon prep and labeling | $0.30–$1.50 per unit | 3PL |
Two details matter here. Duty is assessed on the customs value of the goods, which is normally the price you paid the factory, not including international freight and insurance. And every range above moves. Ocean rates for the same 20ft container swung from under $1,500 to over $6,000 within one recent year, and tariff rates on Chinese goods have been adjusted several times since 2018.
A worked example: 1,000 units of home goods
Assume 1,000 units at $15 FOB Ningbo, 12 CBM and 1,800 kg, shipped LCL to Los Angeles, then trucked to a warehouse in Ontario, CA. The HTS code carries a 3.5% base duty plus a 25% Section 301 tariff.
| Line | Amount |
|---|---|
| Product, FOB | $15,000 |
| Ocean freight, LCL | $1,300 |
| Marine insurance | $150 |
| Duty, 3.5% base | $525 |
| Section 301, 25% | $3,750 |
| Merchandise Processing Fee | $52 |
| Harbor Maintenance Fee | $19 |
| Broker, ISF, bond | $200 |
| Drayage and delivery | $600 |
| Pre-shipment inspection | $300 |
| Total landed | $21,896 |
| Per unit | $21.90 |
That is 46% above the price you started with. If your pricing model assumed $15 landed, the plan was never going to work.
Where the money actually leaks
Duty classification
The HTS code decides your rate. Suppliers often suggest a code that happens to be cheaper, and that suggestion is not advice you can rely on. A broker who classifies the product properly may put you at a different rate. Getting it wrong means back duty, interest, and penalties, sometimes years later.
Detention and demurrage
Free time at the port is short. If documents are late or the drayage truck does not show, you pay roughly $150–$300 per container per day until the box moves.
Rework, not just rejects
An inspection that finds 4% defective units sounds fine until you count what you already paid: freight on those units, duty on those units, and the labor to sort them out. Rework at a 3PL in the US runs far higher than the same fix in China before loading.
Payment and currency
Wire transfers cost $30–$50 each. Platform guarantees take around 3%. Currency conversion spreads run 1%–3%. On a $20,000 order paid in three installments, that is a few hundred dollars nobody put in the budget.
Cash tied up for months
Production takes 30–60 days. Ocean transit adds 25–40. Port and delivery add another week. If you pay 30% deposit and 70% before shipment, most of your money is gone 90 days before you can sell anything.
Timing
Chinese New Year shuts factories for two to four weeks and creates a backlog for a month after. Golden Week does the same in October. Peak season from August to October pushes freight rates up. Orders placed in those windows cost more and arrive later.
Ocean, air, or express?
| Method | Best for | Rough cost | Transit |
|---|---|---|---|
| Express courier | Samples, urgent spares under 100 kg | $8–$15 per kg | 3–7 days |
| Air freight | 100–500 kg, high value per kg | $4–$9 per kg | 7–12 days |
| LCL sea | 2–13 CBM, flexible timing | $80–$180 per CBM plus fees | 30–45 days |
| FCL sea | Over 14 CBM, or fragile goods | $1,500–$6,000 per 20ft | 25–40 days |
The LCL to FCL break-even sits around 13–15 CBM. Below that, LCL is usually cheaper. Above it, you are paying for space you do not use, and your cargo gets handled more often, which means more damage.
How to get a duty number you can trust
- Get the HTS code and confirm it with a licensed customs broker, not with the factory.
- Check whether the code appears on a Section 301 list.
- Check current executive actions on Chinese imports. Rates have been changed repeatedly, so any figure you read in a blog post, including this one, needs verifying before you book.
- The $800 de minimis exemption that used to cover small parcels from China is gone. Low-value shipments now go through duty assessment and entry procedures.
- Ask the broker for a written landed cost estimate before you place the order, not after.
Ways to bring the landed cost down
- Buy FOB instead of EXW. EXW puts China inland trucking and export clearance on you, and you have no leverage to get it cheap.
- Combine suppliers into one shipment. Three LCL shipments cost more than one consolidated container.
- Fix packaging in China. A better carton or a smaller box can cut CBM, which cuts freight and sometimes duty.
- Ask about the container fill. Suppliers sometimes quote a container that is half empty.
- Use a continuous bond if you import more than a few times a year.
- Move toward 30/70 payment terms after two or three clean orders. Cash flow is a cost.
- Book freight three to four weeks ahead. Last-minute bookings get the worst rates.
- Avoid ordering in September and January if the schedule allows it.
First shipment checklist
- Written landed cost estimate, broken out by line
- Confirmed HTS code from a broker
- Signed PO with specs, tolerances, packaging, and labeling
- Pre-shipment inspection booked before the goods are packed
- Bill of Lading, commercial invoice, and packing list checked against the PO
- ISF filed at least 24 hours before vessel loading
- Bond in place before the ship departs
- Delivery appointment booked before the container arrives
Questions importers ask most
Does freight count toward duty? No. US Customs assesses duty on the value of the goods, normally the FOB price, not on international freight and insurance.
Is it cheaper to buy through an agent? Sometimes, and not because of the commission. An agent who knows the factories, catches a bad inspection before loading, and consolidates freight often costs less than the mistakes they prevent. On a simple, low-value order, buying direct is fine.
How much does a container cost to import? For a 20ft container of mid-value goods, plan on the FOB value plus 25%–45% for freight, duty, and fees combined. The exact split depends almost entirely on the HTS code and the current freight market.
Can I avoid tariffs by routing through another country? Only if the goods are genuinely transformed there. Re-labeling or transshipping does not change country of origin, and customs does check.
Globesino acts as a China-based team for buyers who do not speak Chinese and have no way to visit the factory floor: supplier sourcing, factory audits, pre-shipment inspections, consolidation, and delivery to your door. If you want a landed cost estimate for your specific product, send us the specs and we will price it out.