Buyer guide
The Real Cost of Sourcing from India
The factory's unit price is only the first line of your real cost. Buyers who compare quotations on unit price alone are usually comparing different things. This guide breaks the landed cost into its parts so you can budget and compare accurately.
Build the quotation as a breakdown
Ask for the price split into materials, labour or cut-make-trim, and packing. A supplier willing to show that structure is usually the one worth working with, and it is the only way to tell whether a price movement is a raw-material cost or margin.
The costs beyond the unit price
Budget for sampling and development, any bespoke tooling, inspection and testing, packaging, inland transport, freight and insurance, destination duty and VAT, and — if you use one — the sourcing fee. On home goods, freight and packaging can move landed cost more than the unit price does.
Re-confirm commodity-linked prices
Where a product depends on a traded commodity — cotton yarn, metals — a quotation more than a few weeks old should be re-confirmed, and framework agreements should index to the commodity rather than fix a price nobody can hold.
Frequently asked questions
What makes up the landed cost of Indian goods?
Unit price, sampling and tooling, inspection and testing, packaging, inland and ocean freight, insurance, destination duty and VAT, and any sourcing fee. Compare quotations on landed cost, not unit price.
How much does a sourcing agent cost?
Typically a commission as a percentage of order value, sometimes with a development fee. On a first or complex order this is often less than the cost of one avoidable quality failure.
Why do quotations vary so much between factories?
Because they may include different materials, quality levels and scope. A cost breakdown makes the differences visible and the comparison fair.
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