Buying maths
A quote that looks 25% cheaper per pair can land 19% more expensive. The gap is incoterms, packaging and defect allowance.
The short answer: the per-pair price on a quote is usually 55–75% of what you actually pay. Landed cost adds packaging, freight, duty, defect allowance, payment fees and the cost of capital tied up in stock. Two quotes that differ by 30% per pair can land within 5% of each other once these are counted.
Buyers compare quotes on the number in the “unit price” column. Suppliers know this, which is why the columns are rarely comparable. Here is how to build a number you can actually decide on.
| Component | Typical share of landed cost | How it hides |
|---|---|---|
| Product (ex-works) | 45–65% | The only number usually quoted |
| Packaging | 8–20% | Quoted separately, or “included” at a lower spec |
| Freight | 8–18% | Quoted to port, not to your door |
| Duty and import tax | 0–17% | Rarely mentioned at all |
| Defect allowance | 2–6% | Discovered after the batch arrives |
| Payment and FX fees | 1–4% | Absorbed silently by the buyer |
Percentages shift with order size, destination and incoterm, so treat them as a frame for sanity-checking a quote rather than a rule.
Suppose you are ordering 500 pairs to a US address.
| Supplier A | Supplier B | |
|---|---|---|
| Quoted unit price | USD 1.10 | USD 0.82 |
| Product subtotal | USD 550 | USD 410 |
| Packaging | Included, rigid printed box | +USD 180 (box quoted separately) |
| Freight to door | USD 95 (DDP) | USD 75 (to port only) + USD 40 clearance |
| Duty | Included in DDP | Approx. USD 55, payable on arrival |
| Expected defect allowance | 3% → USD 17 | 6% → USD 25 |
| Payment / FX | USD 12 | USD 18 |
| Landed total | USD 674 | USD 803 |
| Landed cost per pair | USD 1.35 | USD 1.61 |
Supplier B looked 25% cheaper per pair and landed 19% more expensive. The difference was not dishonesty — it was a different incoterm and a box that was not in the unit price.
Landed cost per pair still is not the whole picture. If you buy 3,000 pairs to get a better unit price and sell 80 a month, you have financed three years of inventory. At any realistic cost of capital, that carrying cost exceeds the per-pair saving.
A 25% lower unit price is worth nothing if it takes 30 months to turn the stock.
This is the argument for low minimums that rarely appears in sourcing guides, because the people writing them are selling volume. The right order quantity is the one that sells out in roughly six to ten weeks at your actual, not hoped-for, sales rate.
Columns, in this order: product subtotal, packaging, freight, duty, defect allowance, payment fees, then total and per-pair. Fill it for every quote you receive, in the same currency, on the same date.
Two rules make it honest. First, use your realistic defect allowance, not the supplier’s. Second, use the FX rate you will actually transact at, not today’s headline rate. Both are usually worse than the optimistic version, and both are real money.
Get a DDP quote you can compare
We quote to your door with the box included, so the number you see is the number you compare against everyone else's.
Landed cost is the total you pay to get sellable stock to your address: product, packaging, freight, duty, defect allowance and payment fees. The quoted unit price is typically 55 to 75 percent of that total.
Delivered Duty Paid: the supplier's price includes shipping to your address and the import duty. It makes quotes directly comparable. FOB and EXW exclude freight and duty, so a lower number can easily cost more in total.
Usually because they include different things. One may include a printed rigid box and door delivery; the other may quote a poly bag, FOB terms and no duty. Normalising to landed cost usually cuts the gap to a few percent.
Apply your own expected defect allowance rather than the supplier's claim. If a supplier has a documented 3 percent rate and another has no policy, budget 6 percent for the second and see whether the price advantage survives.
Per pair, usually. Per launch, only if the stock turns. If a larger order takes more than about six months to sell through, the carrying cost of that inventory typically exceeds the per-pair saving.