Two suppliers quote the same pet cot at USD 11.80 and USD 12.60. The first is FOB, the second is CIF, and your broker says duty is 7% — which quote is cheaper? If you cannot answer in ten seconds, this article will pay for itself on your next order. Landed cost is the only number that touches your P&L, and it is almost never on the quotation.

The formula, stated once

Landed cost per unit = goods cost + freight + insurance + duty + destination charges + inland move, divided by sellable units. The art is knowing which trade term puts which component on your side of the ledger. FOB means the factory's job ends at the port of loading: you own freight, insurance, duty and destination costs. CIF adds freight and insurance to the factory's invoice — but not duty or destination charges, a distinction that surprises buyers every week. EXW hands you everything from the factory gate; DDP hands the factory everything to your door, which is rare in this category and usually priced with a fat safety margin.

Worked example: 300 elevated cots to Los Angeles

Take a mid-size textilene cot — our mesh elevated pet bed 2310 is the reference class — quoted at USD 11.80 FOB Shanghai, 300 pieces, a 6-8 cbm folded-cot load as described in our cost structure guide. The ledger:

  • Goods: 300 × 11.80 = USD 3,540
  • Ocean freight (LCL or shared container, US West Coast lane): USD 700-1,100 → use 900
  • Insurance (0.3% of CIF value): ≈ USD 13
  • Duty (assume 7% on CIF value where applicable): ≈ USD 311
  • Destination charges (terminal handling, customs entry, ISF/AMS fees): USD 250-400 → use 320
  • Inland move to one warehouse: USD 180-280 → use 230
  • Landed total: ≈ USD 5,314 → per unit ≈ USD 17.71

The FOB quote of 11.80 landed at 17.71 — a 50% uplift. If your target landed-to-retail multiple is 2.2x, retail needs to be about USD 39, which is exactly why we ask your retail band before quoting: the model either supports the lane or it does not, and better to learn that in a spreadsheet than in a warehouse.

Where the uplift hides

Duty percentage deserves a ten-minute call with your broker, because pet products split across HS codes by material and construction — textile cots, metal playpens and plastic-frame stairs do not all land at the same rate, and misclassification is a penalty risk, not a rounding error. Destination charges are the second hide-out: quoted per shipment, they swing 40% between ports and forwarders. And packed volume is the third: two cots with identical specs but different fold-flat cartons can differ by a full cbm on the same order — our product pages publish packed dimensions precisely so your freight math runs on numbers, not guesses. The same discipline applies across families: compare a soft crate like our classic foldable soft pet crate 911 by its folded stack, not its open footprint.

Practical rules

  • Always model FOB and CIF on the same sheet — the gap reveals the factory's freight cost and your forwarder's margin at once
  • Get duty in writing from your broker before the deposit, per HS code, per destination
  • Budget destination charges at a fixed USD figure per shipment and refine after the first container
  • Recalculate landed cost at reorder: freight rates move faster than unit prices

Sensitivity: where the landed number moves

Run the worked example twice with realistic swings and the structure teaches itself. Freight doubles (a congested lane): the USD 900 becomes 1,800 and landed cost per unit rises about USD 3 — painful, survivable, and exactly the scenario FOB vs CIF visibility prepares you for. Duty category shifts one line (misclassification corrected at entry): a two-point duty move swings roughly USD 90 on this order, which is why the broker call is worth its ten minutes. Packed volume improves 10% (a flatter-folding model or tighter carton): freight and a slice of destination charges drop together, quietly funding your next SKU's sample round.

The sensitivity list is also the negotiation list. Unit price is one lever among five — freight mode, duty accuracy, packed volume and payment timing being the others — and for folded pet goods, packed volume is routinely the largest lever the factory directly controls. That is why our product pages publish packed dimensions per model: so the lever is visible when you choose between models, not discovered when the container is sealed.

The takeaway

Unit price is a negotiation; landed cost is arithmetic. The suppliers worth keeping are the ones whose quotations make the arithmetic easy — explicit trade terms, packed dimensions, stable spec sheets. Ask us for FOB and CIF on the same line and you will see how much a quotation can do for your spreadsheet before the first dollar moves.