Quote too low, and the more you do, the more you lose. Only by laying out every cost item and adding them up do you know how much to quote at each layer.
The Complete Makeup of Export Costs
| Stage | Cost Items |
|---|---|
| Factory Gate | Product cost, packaging, profit |
| Inland Leg | Domestic transport, customs declaration, port charges |
| Ocean Leg | Ocean freight, fuel surcharges, etc. |
| Insurance | Cargo insurance premium |
| Destination Port | Destination port charges, import clearance, duty |
| Last Mile | Delivery fees and various surcharges |
Adding It Up Layer by Layer
Ex-works price (EXW price) = product cost + packaging + profit.
From EXW to FOB: add domestic transport, customs declaration, port charges and loading-related costs.
From FOB to CIF: add ocean freight and insurance.
From CIF to DDP: add destination port charges, import clearance, duty and last-mile delivery.
Break the quotation down along these layers, and the customer can see at a glance where the money goes.
With clear layers, when a customer pushes for a lower price you also know which layer can still give and which cannot.
Surcharges That Are Easily Missed
Overweight, overlength and over-girth surcharges.
Residential delivery fee, liftgate fee.
Peak season surcharge, more pronounced when peak season space is tight.
The difference caused by exchange rate fluctuations.
All of the above are subject to live quotations and must be noted in the quotation.
How to Present It on the Quotation
List it by trade term layer, stating what each layer includes.
Also state what is not included, to avoid misjudgment by the customer.
Mark the quotation validity period and the exchange rate base date.
How to Handle Duty
Duty is levied by the destination country's customs according to the HS Code and declared value.
Tax rates vary widely between categories, and the same product may differ under different classifications.
Specific rates are subject to the destination country's customs regulations and live quotations.
When quoting DDP, be sure to list duty separately; do not bundle it all into a flat price.
A High or Low Quote Does Not Equal High or Low Profit
For the same shipment, different trade terms mean a big price difference, but profit does not necessarily change with it.
Customers comparing an FOB price directly with a DDP price is a common misjudgment.
The premise for comparing prices is the same trade term, the same destination and the same quantity.
Otherwise the high or low comparison is meaningless and only leaves you passively pressured to cut prices.
Four Pitfalls That Are Easy to Fall Into
Counting only ocean freight and forgetting destination port charges.
The quote excludes tax, but the customer thinks it includes tax.
The exchange rate is calculated on the quotation date, but by the time payment is received the rate has already changed.
Surcharges are not explained in advance, and prices are raised on the spot when the cargo arrives at port, damaging the customer relationship.
