The FOB unit price looks great, but it feels like the final spend is always higher. Why?
The dimensions
| Dimension | Option A | Option B | How to choose |
|---|---|---|---|
| What's included | Only to ex-factory / shipment | Freight, insurance, duty and fees included | Comparison must use landed cost |
| Hidden cost | Back-end costs separate, easy to miss | All-in, no missed items | Budget decisions use landed cost |
| Decision distortion | Low unit price ≠ low total spend | Reflects true cash requirement | Margin must be calculated on landed cost |
| Fair comparison | Different terms can't be compared directly | Same basis, comparable | Normalize the basis before cross-supplier comparison |
| Cash requirement | Underestimates total cash | Shows the true cash flow per order | Cash-flow planning uses landed cost |
The call
Unit price is for negotiating; landed cost is for deciding. Always convert quotes to landed cost before comparing, or a pretty FOB number will lure you into thin margins.
Where DONGFAN stands
DONGFAN breaks unit price down to landed cost so you see your true margin — not a pretty FOB number.
Low-MOQ manufacturing at DONGFAN — talk to us about your project.