How to compare a quote from one origin against another
Unit price is one line in a comparison that has about ten. A quote from a second country can be lower per piece and still cost you more, once duty, freight, minimum quantities, tooling, payment terms and lead time are counted.
Build the comparison on landed cost per unit, then add the one-off cost of qualifying the new supplier. That is the number that answers the question.
Why unit price misleads
Two quotes on the same product, one from each of two countries. One is 12% cheaper per piece.
Then you find the cheaper supplier requires four times the minimum quantity, needs new tooling because they will not use the existing mould, ships from a port with fewer sailings to your market, and wants full payment before shipment.
The 12% is real. It is also the smallest number in the decision.
The lines a real comparison contains
Work through these for each option. Use the same currency and the same quantity throughout, or the comparison will not hold.
Unit price. Confirm what trade term it is quoted on. A price EXW and a price FOB are not comparable. EXW excludes the cost of getting the goods to the port and clearing them for export, which someone still has to pay.
Minimum order quantity. If one supplier's minimum is four times the other's, you are comparing a small order against a large one. Convert this into cash and into months of stock.
Tooling and setup. One-off costs for moulds, jigs, print plates, or programming. Ask who owns the tooling afterwards and get the answer in writing. If you would have to pay for tooling again at the second supplier, that whole amount belongs in the comparison.
Freight. Depends on volume and weight, not on the value of the goods. Get a rate for your actual carton dimensions and total volume in cubic metres. Sea freight to some destinations is far more expensive from one country than another because there are fewer services on the route.
Duty. This is where origin decides the answer. Your duty rate depends on the tariff classification and the country of origin, and on whether your country has a trade agreement covering those goods. Confirm the rate with your customs broker rather than estimating it.
Trade remedies. Some products face additional duties aimed at specific countries, applied on top of the normal rate. These can be larger than the base duty. Check whether your product and origin are covered before you commit.
Customs clearance and broker fees. Charged per entry. If a change of supplier means more shipments, this multiplies.
Inspection. Cost per inspection, and how many you expect to need. A new supplier usually needs more inspections in the first year.
Payment terms. A supplier who wants 100% in advance is asking you to finance the production. Work out how many days your money is tied up under each offer, and treat that as a cost. If you would borrow to cover it, it is a real interest cost. If you would not, it is capital you cannot use for something else.
Lead time. Longer lead time means you must hold more safety stock to avoid running out. That stock is cash. A supplier who is three weeks faster lets you carry less inventory permanently, which is a saving that recurs every year.
Expected defect rate. If one supplier historically returns 3% unusable and the other 0.5%, add the difference to the cheaper one's unit cost. You paid for those units, shipped them, and paid duty on them.
The cost of qualifying a new supplier
This is the line most comparisons leave out, and it is often the largest one.
Bringing a new supplier to the point where you trust them involves samples, at least one factory assessment, a specification handed over and understood, a first production run watched closely, and usually one round of problems corrected.
Count the hours honestly. For a technical product this can run to several weeks of someone's attention, spread over months. If you are paying someone to do it, price it. If you are doing it yourself, it is time you are not spending on customers.
There is also a risk cost. A proven supplier's performance is known. A new one's is an estimate, and the estimate is usually optimistic.
None of this means you should not change supplier. It means the saving has to be large enough and durable enough to repay the switch. A 5% unit price saving on a product you order twice a year will not.
When a second origin is worth it anyway
The arithmetic is not the only consideration. There are situations where a second source is the correct decision even at a higher landed cost.
Concentration risk. If one factory in one country makes everything you sell, a single event stops your business. A second source is insurance and insurance costs money.
Tariff exposure. If duty on your current origin could rise sharply, having a qualified alternative already tested is worth more than the price difference. Qualifying a supplier takes months. Tariff changes take days.
Capacity. Your current supplier may not be able to grow with you.
Customer requirement. Some buyers require a named alternative source, particularly in regulated industries.
Treat these as strategic decisions with a cost attached, rather than trying to make the spreadsheet justify them.
How to lay it out
Put every option in one table with the same rows, in this order:
- Unit price at your quantity
- Freight per unit
- Duty per unit
- Trade remedies per unit
- Clearance and broker fees per unit
- Inspection per unit
- Landed cost per unit (the sum of the above)
- Tooling and setup, one-off
- Qualification cost, one-off
- Cash tied up, in days
- Lead time, in days
- Minimum order quantity
Rows one to seven give you the recurring number. Rows eight and nine are the entry cost. Rows ten to twelve are the constraints that decide whether the recurring number is even reachable for you.
Then work out how many units you must buy before the saving repays the one-off cost. If that number is more than you expect to buy in two years, the cheaper option is not cheaper.
Two mistakes worth avoiding
Comparing a quoted price against a landed price. Suppliers quote on different terms and rarely say so unless asked. Always confirm the trade term and whether the price includes export clearance.
Assuming duty from the product description. Duty follows the tariff classification, and classification is decided by what the product is made of and how it is constructed, not by what it is called. Two similar products can sit in different codes with very different rates. Ask your broker to confirm the code before you build the comparison, because every duty figure in it depends on that one input.
What to do first
Get the tariff classification confirmed. Every duty number in the comparison rests on it, and it is the one input you cannot estimate.
Then build the table. Most of the time the answer changes once rows two to nine are filled in.
Verified August 2026. Next review February 2027. Duty rates, trade remedies and freight costs change frequently. Confirm current figures with a licensed customs broker before committing to a supplier.