Add up you import costs!
These are exciting times we are living in. The global environment is shrinking. Import times are getting faster. Communication is getting better. And risk is getting GREATER! When the USA economy slowed the world followed. Ten’s of thousands of factories closed in Asia due to this. Many with deposits in hand for orders that they had offered fabulous prices on just to keep work and money flowing. Others had college students form “front companies” on the internet to do direct sales at unbelievable prices direct to customers. Competing directly with their own customers. Some of these were delivered as promised. Many times when the orders were delivered they were decided late, product was not the quality of original sample or quote. Other times customer heard from factory saying product is ready to ship please contact their forwarder to arrange shipment. (when all along they thought the price was to USA and thru Customs)
Quotes are just that! QUOTES!
There are many factors that even well healed and experienced USA promotions companies do not consider in their cost.
- Who pays the freight charge if you have a sample you need to send to the factory to duplicate?
- Who pays the freight on samples from the off shore factory? Is it on your FedEx, DHL, or UPS account. (If so no matter your discount this adds cost to your job)
- Who pays delivery to your customer once the sample is in the USA? (if you do this adds cost to your per piece price)
- Who clears customs, pays duty, pays all exams, inspections, transfer fees, etc at port? These fees are minimum $349.50 USD per shipment regardless of size without your duty cost.
Order Example:
Your quote if $1.15 Fob Asian port for 576 caps
To this, if you need to send a physical spec sample, you will need to add approx $65 usd divided by your cap quantity to get /pc price($1.26).
Double if you have to send original to the factory to duplicate.
Add Production Shipping at a minimum of $85 divided by your cap quantity to get you new /pc price($1.41).
USA Duty will be about $.095 /pc ($1.515).
USA Customs clearance Broker fees approx. $100 per order. Again, divide by your cap quantity to add to your running price($1.695).
Port and handling fees are a minimum of $100 regardless the size of your order. Possible other charges that go with this and happen more often with smaller orders are Custom inspections and exams. These fees are charged to you by the percentage of the LCL (less than container load) container you occupied. These can run $50 – $200 depending on whether they do 1,2, or 3 exams. These costs are always a surprise and come as a separate bill after the fact. Leaving your order at FOB USA PORT with the price over $1.805.
My point being the $1.15 quote has increased a minimum of $.655 per cap and potentially another $.45- $.55 per cap. If this order was only 288 pc your difference doubles. (it is possible for an order of 144 caps to incur $2.33 per cap in fees not including your initial price paid to the factory)
If you quote was CIF (freight and insurance paid to port of entry) this only saves you $.11 of this difference the rest you will still pay.
These costs do not take into account the time your company must spend handling these processes. As you well know time is money. Each shipment will take 3-6 man hours by the time it is complete and filed away. What are you paying your staff for this or what is your time worth? At $15 per hour (very low rate you can add another $.11 to $.22 to your costs.
In reality your $1.15 quote is now over $2.00! Many time I find this scenario when I have quoted a job at $1.80 FOB Sea Port of Entry and been told we are much higher. When all costs are factored that we include in our quote you find our price is decidedly less.
Point is……………make sure quotes including the same services. We can give you our quotes FOB Asian port and or CIF. We totally understand that you might be very experienced and have some good deals. I suggest that you analyze your orders and see where these expenses are getting attributed. Many times they are hidden in your frt. costs etc. and do not get properly applied as cost of goods so you see your true cost per piece.
The old saying still rings true! “If it sounds too good to be true, it probably is!”
It is a competitive market out there make sure you are getting what you pay for. At T.C.& B. we understand your investment and we do everything possible to deliver the best possible value for that investment.
T.C.& B. is not just another cap company. We do not want to be everyone’s cap manufacturer. We do want to be yours!
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