Two suppliers can quote the exact same packaging item, and the one with the “cheaper” price on paper can still end up costing more once the goods actually reach your warehouse. Comparing ex-factory prices without calculating landed cost is one of the most common — and most expensive — mistakes in packaging sourcing.
What landed cost actually includes
Landed cost is the total cost of getting packaging from the factory floor to your destination warehouse, ready to use. Beyond the unit price, it typically includes:
- Tooling (if not already amortized into unit price)
- Inland transport from factory to port or airport
- Export customs clearance in the origin country
- International freight — ocean, air or rail
- Insurance during transit
- Import duties and taxes in the destination country
- Destination customs clearance and handling
- Inland transport to your final warehouse
Why ex-factory price comparisons mislead buyers
A factory quoting EXW (Ex Works) is only pricing the product at its own gate — every step after that is the buyer’s responsibility and cost. A second factory quoting a higher price on a DDP (Delivered Duty Paid) basis may already include freight, duties and destination handling. Comparing these two numbers directly is comparing incomplete information to complete information, and it consistently favors whichever quote hides more costs.
For a full breakdown of what each shipping term actually shifts onto the buyer, see our Incoterms guide.
A simple landed cost framework
To compare suppliers fairly, buyers should build out costs to the same basis for every quote:
| Cost component | Typically confirmed by |
|---|---|
| Unit / ex-factory price | Supplier quote |
| Tooling (if separate) | Supplier quote |
| Inland transport to port/airport | Supplier or freight forwarder |
| Export customs | Freight forwarder |
| International freight + insurance | Freight forwarder |
| Import duty (by HS code) + import taxes | Customs broker / destination country tariff schedule |
| Destination handling + inland delivery | Customs broker / local logistics provider |
Once every quote is expressed on this same basis, the “cheapest” ex-factory price is sometimes no longer the cheapest total cost.
Duty and tax depend on classification, not just origin
Import duty is determined by the HS (Harmonized System) code assigned to the product, and rates vary by destination country and, in some cases, by trade agreement between the origin and destination countries. The same packaging item can carry a different duty rate depending on material composition or declared use — buyers should confirm HS classification with a licensed customs broker rather than assuming a rate based on a similar past shipment.
Volume and consolidation affect landed cost too
Freight cost per unit drops significantly as shipment volume increases, since ocean freight in particular is priced by container or by weight/volume breakpoints rather than linearly. Buyers ordering near a full-container-load threshold sometimes find it worth adjusting order size slightly to avoid paying for a mostly-empty container at LCL (less-than-container-load) rates.
Frequently asked questions
Is DDP always the safer option for a first-time buyer?
Often yes, because the supplier or forwarder absorbs the complexity of customs and delivery, at a premium built into the price. It is easier to budget but usually not the cheapest option once you have logistics experience.
How much does landed cost typically add over ex-factory price?
This varies enormously by destination, product weight/volume, and duty rate, so there is no reliable universal percentage — always calculate it for your specific route and HS code rather than using a rule of thumb from a different product category.
Who can confirm the exact duty rate for my product?
A licensed customs broker in the destination country, using the correct HS code for your specific packaging material and construction.
For the full pre-quote checklist, see how to find packaging suppliers in Asia, or explore shipping and logistics, packaging by country, and prepare a packaging RFQ.