Smart Sourcing
Landed cost math every China buyer should run before signing a PO
Factory price is not your cost—factor MOQ, QC, freight, duties, packaging, and defect reserve before you celebrate a quote.
The factory sent a quote that looks 40% below your current supplier. Before you celebrate, run landed cost math—or you will discover the gap in QC rework, air freight panic, and chargebacks.
The formula (simplified)
Landed cost per unit ≈
(Factory unit price + QC + packaging + inland China logistics + international freight + duties/taxes + defect reserve) ÷ sellable units
Line items buyers forget
| Cost bucket | Why it matters |
|---|---|
| MOQ overbuy | 3,000 units when you sell 200/month ties up cash for 15 months |
| PSI & rework | Cheap units that fail inspection still cost handling time |
| Branded packaging | Mailers and inserts are marketing—not optional for D2C |
| Last-mile speed | Air freight fixes a late factory but kills margin |
| Defect reserve | Plan 1–3% write-off even with good QC |
How Tendlyn uses this in sourcing
We quote delivered-to-warehouse or DDP-style scenarios when clients share target markets—so you compare suppliers on outcome, not factory FOB alone.
