Two quotations for the 'same' product can differ by 30% while describing identical factory prices — the difference hides in Incoterms, packaging assumptions, tooling lines and validity windows. Reading a Chinese quotation line by line is a 20-minute skill that pays on every order you ever place.
- Always identify the Incoterm first: an EXW price excludes everything; FOB includes delivery to the ship in China.
- Check what the unit price assumes: packaging type, carton quantities, materials grade and tolerance.
- Tooling/mould charges, sample fees and setup costs should be separate lines — if absent, they are inside your unit price.
- Quotation validity of 15–30 days is standard; RMB-denominated quotes hold steadier than USD ones.
- Build a landed-cost sheet per SKU before comparing suppliers; the cheapest unit price is frequently the priciest landed unit.
Start with the Incoterm, not the price
| Term | Seller pays up to | You pay from there |
|---|---|---|
| EXW (Ex Works) | Goods at factory door | Everything: China trucking, export clearance, freight, insurance, import |
| FOB (Free On Board) | Loaded on vessel at Chinese port | Ocean freight, insurance, destination charges, clearance |
| CIF (Cost, Insurance, Freight) | Freight + minimal insurance to your port | Destination charges, clearance, inland transport |
A 8.20 RMB EXW price can be worse than an 8.90 FOB price once you pay China-side trucking and export clearance separately. Comparing quotes across different Incoterms without converting them to one basis is the most common quotation mistake.
Interrogate the unit price's assumptions
- Packaging: bulk in polybags, or retail boxes? Retail packaging can add 5–15% and is often silently excluded.
- Materials grade: '304 stainless' vs 'stainless'; 'pure copper' vs 'copper-clad' — vagueness always resolves in the factory's favour.
- Carton/pallet spec: export-grade 5-ply cartons cost more than domestic 3-ply; guess which one survives Mombasa handling.
- Quantity tier: is the quoted price at your actual order quantity, or at the 10,000-unit tier from their price ladder?
- Tolerance and QC standard: AQL level, functional testing, certifications included or not.
Every unstated assumption is a future email that begins 'Please kindly note that price did not include…'.
The lines that should exist (and what their absence means)
- 1Tooling/mould as a separate one-off line for custom parts — if missing, it is amortised invisibly in your unit price and you do not own the mould.
- 2Sample fee and whether it refunds against bulk.
- 3Setup/plate charges for printed goods.
- 4Payment terms: 30/70 with balance against inspection or B/L copy is the healthy norm.
- 5Lead time: counted from deposit receipt or from sample approval? The difference is often two weeks.
- 6Validity: 15–30 days standard. A quote with no validity date will be 'adjusted' when raw materials move.
Ask explicitly whether the mould belongs to you after payment — mould ownership decides whether you can ever move production.
Build the landed cost before choosing
Take each FOB quote and stack your side: ocean or air freight, insurance, port and clearance charges, PVoC/certification where applicable, duty and VAT on the CIF value, inland transport, and the payment cost — remembering that settling the invoice in RMB rather than USD typically saves 2–4% on the goods themselves.
Landed cost per sellable unit is the only number on which suppliers can be honestly compared. It is common for the middle quote on unit price to win on landed cost once packaging, tooling and payment terms are priced in — and that discipline, applied every order, compounds into your margin.
Frequently asked questions
Should I ask for quotes in RMB or USD?
RMB. It reflects the factory's true cost base, holds steadier over validity windows, and pairs with RMB settlement that most factories prefer — often improving the number itself.
The supplier refuses FOB and only quotes EXW. Red flag?
Not necessarily — small factories sometimes lack export licences and route via an export agent. But then price the agent's fees and clearance explicitly before comparing.
How firm is a proforma invoice versus a quotation?
A PI is the contract-grade version: quantities, prices, terms, bank details, validity. Never pay a deposit against a chat message — insist the deal lives on a PI whose details you have verified.
SilkBridge helps importers in Kenya, Uganda and Tanzania pay Chinese suppliers in RMB — documented, reviewed in Nairobi, and tracked to payout.
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