China sourcing
How to Calculate Landed Cost from China
Landed cost is the real unit cost after a product reaches the place where you can sell it. A cheap factory quote is only the first line. Small sellers also need to spread freight, samples, inspection, defects, payment fees, duty reserve, packaging, and prep over the order quantity.
Use this starting formula:
Landed cost per unit = unit product cost + duty/payment reserve + defect buffer + allocated fixed sourcing costs.
Costs to include
- Product unit cost from the supplier.
- Samples, mold/setup fees, custom packaging setup, and bank or platform payment fees.
- International freight, local pickup, forwarding, customs brokerage, prep, inspection, and storage before sale.
- Import duty, VAT/GST reserve, tariffs, and a buffer for exchange-rate movement.
- Defects, missing units, unusable packaging, and return loss.
Decision rule
Sourcing from China is not automatically worth it because the unit quote is lower. It is worth testing when landed cost beats local wholesale, order quantity clears fixed costs, waiting time does not break your launch plan, and resale margin still survives marketplace fees and ads.