How to calculate the cost of importing from China

One of the most important — and most miscalculated — questions when importing from China is: how much does this product really cost delivered to my warehouse? The price in the manufacturer's quote is only a part. If you look only at that number, the margin you thought you had can vanish between freight, duties and taxes.

In this guide we break down, step by step, every cost that makes up the final price of an import (the so-called landed cost) and how to estimate it before placing the order.

1. The factory price (EXW / FOB)

It's the starting point. Always confirm which Incoterm it includes: an EXW (Ex Works) price means the goods are handed over at the factory door and you take on the inland logistics in China; a FOB (Free On Board) price already includes transport to the port and Chinese export formalities. Comparing quotes without checking the Incoterm is the most common mistake and can lead you to pick the wrong supplier.

2. International freight

Freight depends on the mode, the volume and the Incoterm. Sea freight is the cheapest by volume: in groupage (LCL) it's charged per cubic metre and in a full container (FCL) per container. Air freight is much faster but several times more expensive, so it's reserved for urgent or high-value, low-volume goods.

3. Cargo insurance

Although not mandatory, insuring the cargo is highly recommended: it usually costs a small percentage of the value (around 0.3-0.5%) and covers you against loss or damage in transit. For that price, you avoid losing the whole investment to an incident.

4. Customs duties

On entering the EU, goods pay a duty based on their classification (TARIC code). The rate varies widely by product — from 0% to over 12% — so knowing the correct code before importing is key to avoiding surprises and customs offences.

5. Import VAT

On top of the duty, import VAT is charged on the taxable base (goods value + freight + insurance + duty). In Spain the general rate is 21%. It's a cash-flow outlay to plan for, even if it is later deductible for businesses.

6. Customs clearance and destination costs

Customs clearance, the port fee, unloading, any storage and transport from the port to your warehouse also add up. They're smaller items, but ignoring them distorts your margin calculation.

A practical example

For a FOB order of €10,000, with €1,200 sea freight, €50 insurance, a 4% duty and 21% VAT: the duty base would be €11,250 → €450 of duty; the VAT base would be €11,700 → €2,457 of VAT. The total outlay would be around €14,150 plus clearance and delivery costs. In other words, the real cost per unit is considerably higher than the factory price you were quoted.

Common mistakes that raise import costs

• Comparing supplier prices with different Incoterms.
• Forgetting VAT in your cash-flow forecast.
• Misclassifying the product and paying the wrong duty.
• Overlooking destination costs (port, clearance, final transport).

How R'S WARE helps you

We prepare a total cost calculation before you buy, with the correct tariff classification and the real freight, so you know exactly your margin. And with the DDP model we work with a fixed price — duties and taxes included — so there are no surprises when the goods arrive.