Nov 1, 2026Buying Guides
Freight, Customs & Duty: The Hidden Costs Behind Your MOQ Price
Your quotation price is not your landing cost. Freight, insurance, duty, VAT and clearance fees sit between the factory and your shelf - how to estimate them before you commit.
The number at the bottom of a quotation is the factory price, not the cost of getting product to your shelf. Between the two sit freight, insurance, duty, import VAT and clearance - and for a light, bulky product like cosmetics, they can move the unit cost more than the factory price itself.
Start With the Incoterm
The three-letter code on the quotation decides where the seller's cost ends. FOB (free on board) means the price includes delivery to the port and loading; sea freight, insurance and destination charges are yours. CIF adds freight and insurance to the port of destination. Ex-works ends at the factory gate - useful to compare, painful to operate.
Compare quotations only when the incoterm matches. A cheap FOB price and an expensive CIF price are not a comparison.
Freight: Volume, Not Just Weight
Liquid and airy goods charge by volumetric weight - a carton of lip gloss tubes takes up far more space than its kilos suggest. That is why case packs and carton dimensions belong in your quotation: they change the freight. Sea freight (LCL or FCL) is the default for full-season quantities; air is for samples and urgent replenishment, at several times the cost.
Duty: A Rate You Look Up, Not Guess
Duty depends on the product's HS code and your destination country. The rate is a public number, confirmed by a customs broker - no supplier can quote it for you reliably. Ask your broker to check the classification of your specific item, including the case and pack, because the wrong code is a classic source of surprise charges.
VAT and Clearance Fees
Import VAT is usually recoverable for a registered business but it still has to be paid at clearance, and it is calculated on the value plus freight plus duty. On top of that come broker fees, terminal handling, document fees and the last-mile delivery to your warehouse. For small shipments these fixed charges can outweigh the duty itself.
The Landing-Cost Sheet
Build one sheet per order: factory price plus freight plus insurance plus duty plus VAT plus clearance plus delivery. Divide by the sellable units after damages. That number is what your retail price has to cover - and it is often the first time a buyer sees the real unit cost.
A useful habit: plan a buffer for clearance delays, not just for costs. A container that sits for a week has a cost too - in missed season, not in duty.
Send us your destination and estimated quantity and we will quote FOB or CIF with carton dimensions, so your broker can price the rest before you commit.
