Factory sourcing
A landed cost checklist for sourcing products from China
Build a purchasing cost estimate that separates product, development, inspection, transport and destination charges, with clear assumptions and update points.
Define where the estimate ends
A total cost needs a stated endpoint: factory handover, the destination port or airport, or receipt at a warehouse. Define whether the estimate covers the first order, one shipment or the project including development. Record the product version, quantity, packing, currency and delivery arrangement. A clear boundary helps identify missing costs and prevents charges already included in one quotation from being counted again.
Points to check
- State the endpoint and services included in the estimate.
- Identify the order quantity, version and transport plan.
- Separate first-order investment from repeat-order costs.
Group charges by the stage at which they arise
Begin with the goods, then list applicable sampling, development, tooling, packaging, inspection, factory-side transport, international carriage and destination charges. Not every purchase has every charge; mark items that do not apply and explain why. For third-party services, retain the quotation source, conditions and validity. A cost without a quotation should remain an estimate or an open item rather than being given an unsupported precise amount.
Points to check
- Record the provider and charging basis for each item.
- Distinguish one-off, per-unit and per-shipment charges.
- Identify missing quotations and items outside the chosen scope.
Check inclusions at every handover point
Factory and forwarder quotations can overlap, or leave a gap between their respective services. Compare the service descriptions, delivery points and responsible parties in one table. Ask appropriately qualified advisers to confirm the applicability and basis of destination taxes, declarations and other specialist charges. A general checklist can organise these questions, but it cannot determine the requirements for a particular product and destination.
Points to check
- Link included charges to the quotation that covers them.
- Identify who arranges and pays for each handover task.
- Record the source and conditions of specialist cost estimates.
Make uncertainty visible in the numbers
Label each entry as confirmed, indicative or awaiting confirmation, with the date of its source. Use a consistent currency-conversion basis while keeping original-currency amounts. Transport charges may depend on final carton counts, dimensions, weights and service arrangements, so update them when packing data changes. Match the precision of the estimate to the information available rather than implying certainty through detailed decimals.
Points to check
- Retain original amounts, conversion assumptions and calculation dates.
- State which cargo or service assumptions affect each estimate.
- Assign an owner and update point to open costs.
Compare purchasing options alongside stock and cash needs
A larger order may reduce some costs per unit while changing stock exposure, payment commitments and transport requirements. Compare order quantities, split shipments or transport options using a consistent set of confirmed assumptions. Where costs remain uncertain, show alternative scenarios instead of presenting only an optimistic total. Select the arrangement against actual demand and the commitments your business is prepared to take on.
Points to check
- State the quantity and delivery arrangement for each option.
- Explain how one-off costs are allocated.
- Show both total spending and a comparable unit-cost figure.
Maintain the estimate as the order develops
Reconfirm affected charges when samples, specifications, packaging, quantities or the transport plan change. Before ordering, check quotation validity and outstanding items; after shipment, compare actual charges with the estimate. XUANHEYI can help collect factory quotations and purchasing information, identifying what is confirmed and what still needs checking. An estimate reflects current information and is not a guarantee of final charges or a promised saving.
Points to check
- Record the reason and approval for each change.
- Recheck major charges before payment and shipment.
- Keep estimate-to-actual differences for the next purchase.
These guides provide general practical information for purchasing decisions. Confirm the requirements and commercial terms for your own project.
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