"The price on the quote was $1.20, but by the time it hit my warehouse it was $2.05." I hear that sentence constantly from importers who didn't know how to read a China factory quote. The factory didn't lie — they quoted exactly what they meant to quote. The gap came from the six things a quote never says out loud, and nobody taught them how to see it.
I'm Gavin, a sourcing agent in Shanghai, and I read these quotes every single day. In 2026, with freight, tariffs, and raw-material swings shifting month to month, the difference between a "cheap quote" and a "cheap landed cost" is larger than ever. This is the decode sheet I hand my own clients — the real cost structure, where the markup hides, and the five questions that expose it.
What a Factory Quote Actually Contains
A professional China supplier's RFQ response is remarkably consistent. The five sections are standard:
- Unit price — almost always quoted per piece, not per carton.
- Trade term — EXW, FOB, CIF, DDP (and whether it's a port in China or your door). This single line decides how much risk and cost you inherit.
- MOQ and price breaks — usually two to three tiers (e.g., 500 / 1,000 / 3,000) with lower prices at higher volumes.
- Lead time — production time after sample approval, normally 10–30 days.
- Payment terms — typically 30% T/T deposit and 70% balance against the BL copy for FOB goods.
Every field matters, but the two that inflate your final cost the most are the trade term and the payment terms — precisely the two most buyers skip past.
The Quote's Hidden Cost Layers
Here's the uncomfortable part: the unit price you see is rarely the price you pay. That $1.20 FOB Guangzhou covers the product loaded onto the truck at the factory — nothing after that. Your real figure is the landed cost, which stacks on layer after layer:
- FOB unit price: $1.20 — includes product, packaging, and loading to the domestic truck.
- Ocean freight — per cubic meter or per container (40ft HC runs roughly $800–$1,600 in 2026 depending on lane and season, up sharply from 2023 lows).
- Insurance: usually ~0.2%–0.5% of cargo value if you buy it; most small importers skip it and then regret it.
- US side landing charges: customs duty (0–32% MFN), Merchandise Processing Fee (~$69 minimums), and any Section 301 / 122 tariff surcharges.
- Inland freight from your port to warehouse — easily forgotten until the bill arrives.
- Bank and payment fees: wire (T/T) transfer fees of $20–$50 per leg, or 2–4% if you pay by credit card / PayPal on small orders.
Add it up and a $1.20 FOB quote for a typical consumer good can land fully at $1.75–$1.95 in your warehouse — 45–60% higher than the number that caught your eye. That's not a scam; it's the difference between FOB and landed, and it's the single most common budgeting mistake I correct.
Where the Markup Hides
Beyond the logistics layers, there's the question of how much profit sits inside the per-unit price itself. On a typical factory quote, the margin is relative to order size:
- Small orders (under 300 pcs): factory margin often 20–40% because overhead per piece is high.
- Mid orders (300–3,000 pcs): 15–25%.
- Container or repeat orders: 5–15%.
This is also where less scrupulous intermediaries — traders and some "free agents" — insert their cut. A trader who sources from a factory and resells to you typically adds 10–30% on top of the factory price and never shows you the original quote. That's why asking for a factory name and a line item per material is a negotiation, not nosiness: it's the only way to see how many hands are on your price.
Five Questions That Expose a Quote's True Cost
Before you say yes to any quote, ask these in writing. They turn a two-line price into a transparent one:
- 1. "Is this a factory price or a trader price?" If they stall, they're a trader — which is fine, but you should know you're paying a layer.
- 2. "What does the unit price include and exclude?" Packaging? Color-matching? The first carton samples? Most quotes exclude prepress and sampling fees.
- 3. "Is freight a flat number or does it scale with volume?" A low price that ignores real freight volume isn't a savings.
- 4. "At what order size does the price break, and what's the tariff on it?" Know the HTS code and duty before you commit — a "cheap" commodity can carry a 25% Section 301 surcharge that a different classification avoids.
- 5. "Is the price firm through delivery, or subject to raw-material and currency adjustment?" Plastics, steel, and the RMB/USD rate move — a quote without a validity window is a quote you can't rely on.
A supplier who answers all five clearly is showing you their real cost structure. One who deflects is pricing you based on what they think you'll pay — and that premium is coming out of your margin, not theirs.
The Rule
Never compare China suppliers on the FOB line alone — compare landed cost: unit price plus freight, duties, agent or trader margin, bank fees, and inland haul to your door. The lowest quote per piece is very often the most expensive order you'll ever place, once every hand on the price gets its cut.
Ask for a full cost breakdown in writing, confirm the trade term out loud, and price your import against the total it costs to reach your shelf — not the number at the top of the RFQ. If you're staring at a quote right now and aren't sure what the true landed figure really is, tell me what you're importing, the FOB price, and your destination, and I'll break down what it's actually going to cost you before you wire a single yuan.