The factory price is not the price. This guide adds up every charge between a Chinese factory and a UK warehouse — with a worked example showing how £4.00 per unit becomes £5.95.
Landed cost is the total cost of getting a product from a Chinese factory onto a shelf, warehouse rack or fulfilment centre in the UK — every charge included. It is the number that decides whether an import is profitable, yet most first-time importers price their products from the supplier quote alone. This guide breaks down every component and works through a real-shape example.
Landed cost = product cost + China-side charges + freight + insurance + import duty + import VAT + UK port and clearance fees + UK delivery. Divide by sellable units for the true unit cost.
| Component | What it covers | Common surprise |
|---|---|---|
| 1. Product cost | The factory price on the agreed incoterm | Tooling, sample and packaging fees quoted separately |
| 2. China-side charges | Inland haulage, export clearance, port handling (mainly EXW quotes) | EXW quotes look cheaper than FOB but shift these costs to the buyer |
| 3. Freight | Sea (LCL/FCL), air or courier to the UK | LCL is priced per CBM with minimums; small shipments pay proportionally more |
| 4. Insurance | Marine cargo cover, typically 0.2%–0.5% of value | Carrier liability alone is capped far below goods value |
| 5. Import duty | Customs value × duty rate for the commodity code | Anti-dumping duties on certain Chinese goods |
| 6. Import VAT | 20% on goods + freight + duty | Charged on the duty as well, not just the goods |
| 7. UK port & clearance | Terminal handling, customs entry, broker fee, possible exam fees | Quoted separately from the freight rate |
| 8. UK delivery | Haulage from port to door, pallet network or courier | Fulfilment centre booking rules and relabelling costs |
A UK e-commerce brand orders 2,000 units of a plastic homeware product at £4.00 per unit, FOB Shenzhen, shipping LCL at 6 CBM.
| Product cost (2,000 × £4.00, FOB) | £8,000 |
| Sea freight LCL, 6 CBM + origin/destination charges | £950 |
| Marine insurance | £40 |
| Import duty at 6.5% × £8,990 | £584 |
| Import VAT 20% × (£8,990 + £584) | £1,915 |
| UK clearance, entry and handling | £180 |
| Pallet delivery to warehouse (3 pallets) | £240 |
| Total landed cost | £11,909 |
| True unit cost | £5.95 — not £4.00 |
The landed unit cost is 49% higher than the factory price. A product priced for retail using the £4.00 figure would quietly lose most of its margin. (For a VAT-registered business using postponed VAT accounting, the £1,915 VAT line is recovered through the VAT return — cash-flow relevant, but wise to include when stress-testing the margin.)
A useful landed-cost estimate needs only six inputs: the unit price and incoterm, carton dimensions and weight, total quantity, the commodity code, the destination postcode, and how fast the goods are needed. With those, sea, air and courier options can be compared on a like-for-like landed basis — which is exactly the comparison behind Bridgeway's China to UK shipping service, with the duty and VAT assumptions itemised through customs clearance support before anything is booked.
Rule of thumb: for sea freight imports of general goods, expect the landed cost to run 35%–60% above the FOB price once all eight components are included. Anything quoted at less deserves a line-by-line check.
Common questions
Many UK resellers target a landed unit cost of no more than a third of the retail price for e-commerce, leaving room for platform fees, returns, storage and marketing. The right ratio depends on the channel — the key is that the calculation starts from landed cost, not factory price.
A DDP quote bundles everything into one delivered price, which looks simple but hides who is acting as importer of record, what values are being declared and whether the VAT paid is recoverable. A landed-cost breakdown keeps the same convenience while keeping the numbers visible and usable.
With real carton dimensions, the correct commodity code and a current freight rate, a pre-order estimate is typically within a few percent of the final figure. The components that move are freight rates and exchange rates, which is why estimates should be refreshed if ordering is delayed.
The structure is identical, but air freight is charged on volumetric or actual weight (whichever is greater), and the freight component becomes a much larger share of landed cost. Air suits high-value, low-weight or urgent goods; sea suits almost everything else.
Get a real figure
Send the supplier quote, carton details and destination. Bridgeway will reply with a practical route and cost view.