Landed Cost for China Sourcing Teams: Beyond Unit Price

Landed cost is the decision model for getting a defined quantity of saleable goods to the chosen destination—not simply the factory quotation. The model should separate verified facts, current quotes and planning assumptions so that a reviewer can see which number changed.

Build the model in layers

• Commercial: unit price, tooling, moulds, samples, packaging, minimum order and payment timing.
• Logistics: pickup, origin charges, freight, insurance, destination charges, customs representation and inland delivery.
• Border: customs value, commodity code, origin, current duty and any product-, producer- or origin-specific measure.
• Tax and regimes: import VAT treatment, national levies and a separate CBAM scope check where relevant.
• Quality and compliance: inspection, testing, documentation, rework, scrap and expected warranty or return cost.
• Time and uncertainty: financing, storage, delay recovery and a contingency that is explicit rather than hidden in the unit price.

Never infer a duty rate from a broad category

A label such as “electronics” or “metal product” does not establish a tariff. Record the product facts and classification reasoning, then query current TARIC using the code, origin, intended import date and any relevant producer or additional code. Save the inputs, result, source text and retrieval date. Binding Tariff Information or customs advice may be appropriate where the exposure is material.

Keep VAT and CBAM separate

TARIC does not calculate every national tax treatment. Model import VAT with the destination country and the importer’s recovery position. CBAM applies only where the goods, code, operator and other conditions are in scope; it is not a generic tariff on all imports from China. Use the Commission’s current CBAM guidance for the definitive regime.

Use scenarios, not invented precision

For a comparison, label each input as a supplier quote, forwarder quote, official rate, historic observation or assumption. Run a base, downside and recovery case for volatile inputs such as freight, defects, delay and reinspection. A lower unit price can still lose if the downside case requires extra testing, rework or expedited freight—but the conclusion should come from your numbers, not a universal industry percentage.

Compare saleable output

If the model includes a defect or scrap allowance, calculate cost per saleable unit and show the assumed rate. Do not present a hypothetical allowance as the supplier’s measured performance. Update it after each inspected lot and keep safety or legal non-conformity outside a simple financial trade-off.

The useful output is a side-by-side candidate matrix with the same delivery basis, quantity, currency, date and confidence level. Recalculate before committing funds whenever classification, freight, product design, supplier evidence or order terms change.

Sources and scope

• TARIC — the EU integrated tariff database
• European Commission Access2Markets
• European Commission CBAM definitive-regime guidance

Last reviewed 13 August 2026. Operational guidance, not legal advice. Recommendations labelled as judgement should be tested against the product, supplier, contract and market involved.