Two quotations differed by nine per cent on the unit price and by two per cent on landed cost. The freight explained it: the cheaper unit packed into a carton that loaded fewer units per container, and the difference in carton dimensions cost more than the saving on the product.
Charger landed cost: the model in six steps
Unit price, packaging and carton data, freight, duty and taxes, handling, and the cost of holding stock with the price of change.
The model is built in that order because each step consumes the previous one: freight depends on the carton, duty depends on the declared value, and the cost of holding depends on the shipment size. Building it once makes every later quotation comparable without repeating the exercise.
The purpose is not accounting precision. It is to identify which decisions move the landed cost, because two of the six steps are under the buyer’s control and one is routinely ignored.
Step 1: the unit price, with its scope
The unit price enters the model only with its configuration, packaging version and accessory set.
Every later step multiplies or adds to this figure, so an error here propagates through the model. Use the price at the quantity you will actually order, not the quantity that makes the unit price look best, and keep the fixed charges outside the model at this point so they can be treated as one-off rather than per unit.
Step 2: packaging and carton data
The step that decides the freight and is most often missing.
Ask for the carton dimensions, the gross weight, the units per carton and the pallet pattern. Those four figures determine how many units travel per container, and therefore the freight per unit. A carton that is slightly larger can reduce the units per pallet by a whole layer, which is why packaging is a cost decision rather than an artwork decision.
Step 3: freight and insurance
Priced per shipment and expressed per unit for comparison.
Freight depends on the mode, the route and the volume, and the per-unit figure changes with how full the container is. Insurance follows the terms: where the risk transfers to the buyer at the port of loading, the insurance belongs in the buyer’s model, and where it transfers later, it is inside the supplier’s price. Recording which is which prevents paying for it twice or not at all.
Step 4: duty, taxes and the declared value
The declared value is the base, and the classification decides the rate.
Duty follows the customs classification of the product and the value declared, which is why the classification belongs in the model rather than in the forwarder’s inbox. Taxes are recovered in some jurisdictions and not in others, and the treatment changes the effective cost for a business buyer. Both figures come from the destination market and the product, not from the supplier.
Step 5: handling, inspection and inland transport
The costs between the port and the shelf.
Port charges, customs clearance, inland transport, the receiving inspection and any repacking or relabelling that happens locally. On a multi-market programme this step can exceed the freight, particularly where a shipment is broken into several destinations or where a retailer’s labelling requirement means relabelling in the destination country.
Step 6: holding stock and the price of change
The step that does not appear on any invoice until it matters.
Holding stock costs money through capital, storage and the risk of obsolescence; the price of change covers the re-test, the packaging revision or the delay that follows a specification change made late. Neither belongs in a per-unit quotation, and both belong in the model if a programme is being compared against another on total cost rather than on price.
| Step | Input needed | Who provides it | Common omission |
|---|---|---|---|
| Unit price | Configuration, packaging version, accessories | The supplier | The order quantity |
| Packaging and carton data | Dimensions, weight, units per carton, pallet pattern | The supplier | Carton dimensions |
| Freight and insurance | Mode, route, volume, delivery term | Forwarder and terms | Who insures |
| Duty and taxes | Classification and declared value | The destination market | The classification |
| Handling and inland | Port, clearance, receiving, local work | The buyer’s own operation | Local relabelling |
| Holding and change | Order size, storage, change history | The buyer | Capital and obsolescence |
Where the buyer has leverage
Two steps in the model are decisions rather than costs.
The packaging, because it determines the carton and therefore the freight; and the order size, because it determines how the fixed charges and the freight divide across the units. A third, the delivery term, is a decision about who carries the freight and the risk rather than a cost to be minimised. Working on those three is what changes a landed cost, while negotiating the unit price changes only the first step.
Keeping the model current
Four triggers that change the numbers.
A change to the carton or the insert; a change in freight rates or route; a change to the classification or the declared value; and a change to the order size. Each updates one or two lines rather than the whole model, which is why the model is worth keeping as a spreadsheet rather than rebuilding for every quotation.
FAQ
Why does the cheapest unit price sometimes produce the highest landed cost?
Because the carton, the pallet pattern and the delivery term are outside the unit price. A larger carton or a poorer pallet pattern can cost more in freight than the saving on the product. The carton, the pallet pattern and the delivery term sit outside the unit price, and a larger carton can cost more in freight than the saving on the product.
Should the supplier provide the carton data?
Yes, and it should be part of the packaging specification: dimensions, gross weight, units per carton and pallet pattern. Without those four figures the freight line is an estimate. Ask for the dimensions, the gross weight, the units per carton and the pallet pattern as part of the packaging specification, because without those four the freight line is an estimate.
Is duty the same for every charger?
It follows the classification of the product in the destination market and the value declared, which is why the classification belongs in the model. Two similar products can fall under different classifications with different rates. The classification of the product in the destination market and the value declared decide it, which is why the classification belongs in the model rather than in a note.
How should a change be priced into the model?
As a scenario: rebuild the model with the new packaging version or quantity and compare the landed figure. That is faster than renegotiating, and it shows whether the change is worth making before it is requested. Rebuild the model with the new packaging version or quantity and compare the landed figure, because that shows whether the change is worth making before it is requested.
What is the most common omission?
Local work in the destination market, such as relabelling, repacking or retailer-specific inserts. It rarely appears in a quotation and it is often the largest line after the goods themselves. Local work in the destination market such as relabelling, repacking or retailer-specific inserts rarely appears in a quotation and is often the largest line after the goods themselves. Ask for those costs as a separate line in the quotation.
Next step
Send the configuration, the packaging direction and the destination markets to Wecent Group through the contact page. The reply provides the unit price with its scope, the carton and pallet data, the delivery terms and the certification position for each market in the model. Related reading: OEM and ODM charger manufacturing, charger manufacturing services and the factory floor. External references: ICC Incoterms rules, International Trade Centre Trade Map, IEC standards, EU CE marking rules, UL standards and certification and Intertek testing services.
{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”Why does the cheapest unit price sometimes produce the highest landed cost?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Because the carton, the pallet pattern and the delivery term are outside the unit price. A larger carton or a poorer pallet pattern can cost more in freight than the saving on the product.”}},{“@type”:”Question”,”name”:”Should the supplier provide the carton data?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Yes, and it should be part of the packaging specification: dimensions, gross weight, units per carton and pallet pattern. Without those four figures the freight line is an estimate.”}},{“@type”:”Question”,”name”:”Is duty the same for every charger?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”It follows the classification of the product in the destination market and the value declared, which is why the classification belongs in the model. Two similar products can fall under different classifications with different rates.”}},{“@type”:”Question”,”name”:”How should a change be priced into the model?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”As a scenario: rebuild the model with the new packaging version or quantity and compare the landed figure. That is faster than renegotiating, and it shows whether the change is worth making before it is requested.”}},{“@type”:”Question”,”name”:”What is the most common omission?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Local work in the destination market, such as relabelling, repacking or retailer-specific inserts. It rarely appears in a quotation and it is often the largest line after the goods themselves.”}}]}