Everyone Looks at the Unit Price
You send the same RFQ to three factories. One comes back at $4.80. Another at $5.40. The third at $6.10. Most buyers stop there and take the $4.80.
That is how expensive orders start.
The unit price is only one line on the real bill. Freight, duties, inspection, payment terms, and what happens when something goes wrong all sit outside that quote. Until you add them up, you are not comparing suppliers — you are comparing stickers.
What Landed Cost Actually Means
Landed cost is what it costs you to get usable product into your warehouse (or to your customer), not what the factory prints on a PI.
A practical landed-cost view includes:
- Factory unit price (EXW / FOB / CIF — know which)
- Ocean or air freight, plus local pickup and handling
- Duties, VAT/GST, and brokerage
- Pre-shipment QC and any third-party lab tests
- Payment risk (deposit size, balance timing, currency)
- Defect and delay cost (rework, air freight rescue, missed sales)
Why the Lowest Quote Often Costs More
Factories that win on unit price often push cost somewhere else.
- Lower EXW, but the cartons are less dense — you pay for more containers.
- Aggressive MOQ that forces you to hold inventory you did not plan for.
- Vague packaging specs that fail carton crush or drop tests after you have already paid.
- "Savings" that disappear the first time you need a rework run or an emergency air shipment.
A Simple Check Before You Pick a Winner
Before you award an order, run the same landed-cost sheet on every shortlisted quote:
- Convert every offer to the same Incoterm and the same destination.
- Estimate freight for the real carton size and packing density, not a guess.
- Add duty using the correct HS code — wrong codes create surprises at customs.
- Budget for at least one mid-production or pre-shipment inspection.
- Stress-test payment: what are you exposed to if the first shipment is late or off-spec?
- Ask what a 3–5% defect rate would cost you in reclaim, sorting, or lost sales.
Compare Quotes the Way You Will Actually Pay
At LS International we build landed-cost comparisons for buyers before they lock a factory — unit price, freight options, duty exposure, and QC plan on one page, so you are not guessing from three different PI formats.
If you are sitting on competing quotes and want a clear landed-cost view before you wire a deposit, Get a free sourcing quote or talk to us. We will help you compare what you will actually pay — not just what fits on the first line of the quote.