A $2.40 quote landed in your inbox. Your competitor quotes $2.40 too. Six weeks later your product costs $4.50 landed; theirs costs $3.10. Same FOB price. This is an anatomy of where the difference hides — line by line, using a synthetic-but-typical quote for a 500-unit LCL shipment to the US West Coast.
The quote you actually see
Product: 500 units, FOB Ningbo
Unit price: $2.40
Payment: 30% deposit / 70% before shipment
That's the entire email. Everything the supplier considers their problem ends at the factory gate. Everything after "FOB" is a cost you pay, structured by decisions you make — or default into.
The stack underneath $2.40
1. Inland freight + China customs: ~$0.10–0.18/unit.
"FOB Ningbo" assumes the goods reach Ningbo. But if the factory is in Yiwu and quotes "FOB Shanghai" because that's what you asked for, you're paying 400km of extra trucking invisibly marked up by whoever arranges it.
2. Ocean freight (LCL): ~$0.15–0.35/unit.
LCL rates swing 2x seasonally. A $2.40 quote given in March and executed in pre-Golden-Week September is not the same shipment economy. The factory won't warn you; the rate quote expires quietly.
3. US duty: 0–25% of declared value.
The spread on this single line is bigger than most people's total margin. Two "identical" products with different HTS classifications differ by $0.60/unit here. Importers routinely discover this only at the customs bill.
4. Customs bond + entry fees: ~$0.05–0.10/unit.
Small, fixed, boring — and the first place a new importer overpays because they buy a single-entry bond for a recurring business.
5. Destination drayage + deconsolidation: ~$0.10–0.20/unit.
LCL means your freight gets touched more. Every touch is a fee, and every fee has a "we had no choice" story attached.
6. Last-mile to your 3PL: ~$0.08–0.15/unit.
Same quote, two outcomes
- Landed at $3.10: factory-nominated port matched the quote, booking locked early, HTS code checked before the PO, CFS fees negotiated into the drayage quote.
- Landed at $4.50: "FOB Shanghai" from a Yiwu factory, September sailing, duty misclassified by one chapter, single-entry bond, and a deconsolidation fee nobody quoted.
Nobody cheated you. Each line item is a small, defensible decision that compounded 87% against you.
Why suppliers don't help you with this
They can't. The stack is decided by your freight forwarder, your customs broker, and your HTS research. The supplier's incentive is a FOB number that wins the PO. The system works fine when you know the stack exists. It eats you when you compare only the tip.
The two questions that catch most of it
Before you accept any FOB quote, ask:
- "Which port is the factory actually closest to, and what's the inland delta if we switch?" (Catches the 400km trucking markup.)
- "What's the HTS code and duty rate for this exact product?" (Catches the 0–25% spread before the customs bill does.)
Run it with your own numbers
I built a landed-cost calculator that stacks all six lines with your quantities, your freight mode, and your duty rate — every field editable, nothing leaves the browser: Landed Cost Calculator
It's part of an open-source (CC0) China sourcing toolkit: the supplier verification system, a red-flag checker, and a supplier-phrase decoder.
The $2.40 quote is synthetic — a composite of common patterns, not a specific supplier's pricing. The stack math is real. What's the landed-cost line that surprised you the first time you ran the numbers?
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