How to read a China quote

Short answer. A Chinese factory quote gives a unit price at a minimum quantity under a delivery term, usually EXW or FOB. It rarely includes packaging, tooling, samples, freight, duty, import VAT or the cost of checking the goods. Add those lines yourself, or ask for a delivered-cost quote. Two quotes can only be compared once both are complete and on the same term.

The lines on a quote and what they mean

• Unit price. The price per piece at the stated quantity. Check whether it is in USD or RMB and whether it says "tax included" or "tax excluded". Chinese value-added tax is 13 percent; export goods are often quoted without it because the factory claims a rebate, but the quote must say so.
• Minimum order quantity. The smallest run at that price, usually per style and per colour. The price at your real quantity may differ. Ask for a price ladder: for example 300, 500 and 1,000 pieces.
• Delivery term (Incoterm). EXW means collected at the factory gate: you pay everything from there. FOB names a port and includes inland transport and export clearance up to loading. CIF or DDP include more but hide freight inside the unit price. Compare quotes only on the same term.
• Tooling and set-up. Moulds, dies, screens, embroidery files, pattern grading. A one-time cost, usually paid upfront. Ask who owns the mould.
• Sample fee. Often two to five times the unit price per sample, sometimes credited against the bulk order. Ask.
• Packaging. Polybag, hangtag, box, carton markings. Often excluded unless specified.
• Lead time. Days from deposit to goods ready, not to goods delivered. Add freight time.
• Payment terms. Commonly 30 percent deposit and 70 percent before shipment. Anything demanding 100 percent upfront from a new supplier is a warning.
• Validity. A quote with no validity date can be repriced when you order. Ask for 30 days.

Building the delivered cost

Per unit, landed at your warehouse in the EU:

1. Factory unit price (on the agreed term)
2. Tooling and samples divided by the order quantity
3. Packaging if excluded
4. Inland transport and export clearance (included in FOB, not in EXW)
5. Sea or air freight and insurance
6. EU customs duty at the tariff rate for the product code
7. Import VAT at your country's rate, on goods plus freight plus duty
8. Last-mile delivery and warehouse handling
9. Inspection and your sourcing partner's fee

For a EUR 8 item shipped by sea, lines 2 to 9 commonly add 40 to 80 percent. By air, more. Decide on the delivered cost, never on line 1.

Red flags

• A unit price with no specification attached. You will get what the factory thinks you meant.
• "FOB" with no port named.
• A quote in RMB when your sales are in EUR, with no agreed exchange rate or validity.
• Packaging and labels "to be confirmed".
• A sample fee that is not credited and not explained.
• "CE certified" or "GPSR compliant" with no documents offered. Ask for the declaration of conformity and the test reports before paying a deposit. See CE marking for small electronics.
• Lead time quoted from "order" rather than from deposit or from sample approval.
• A price far below the other quotes. The difference is usually material, thickness, finish or a different factory doing the work.

Questions to send back with every quote

Which Incoterm and which port. Tax included or excluded, and currency. Minimum per style, colour and size. Price at two higher quantities. What packaging is included. Who owns the tooling. Sample cost and whether it is credited. Lead time from deposit. Validity. Which standards the product is tested to and who holds the reports.

Further reading

Read minimum order quantities for custom apparel and the EUR 3 parcel charge guide. Equilinq quotes show three lines: factory price as quoted, our fee separately, freight and duties at cost. See Pricing and Source.