How to compare two Chinese supplier quotes
Why two supplier quotes are never comparable as they arrive, how to normalise them onto the same Incoterm, and when the cheapest offer is the right one.
Two quotes from Chinese suppliers are almost never comparable as they arrive, because they are not quoting the same thing: the Incoterm, the unit of price, the specification, the quantity band and the packaging all change. On an order of 3,000 trunk organisers, one offer of 1.10 USD per piece EXW Foshan ends up costing 1.26 USD per piece once inland transport to the port, Chinese export clearance and the individual box it did not include are added; another at 1.18 USD FOB Shenzhen, which looked 7% more expensive, comes out 240 USD cheaper. Normalising both offers before looking at the price turns the comparison into arithmetic.
Why two quotes are not comparable as they arrive
A quote is not a price: it is a price plus a set of conditions that are not written down. The number you see summarises eight decisions — Incoterm, unit, specification, quantity band, packaging, tooling, payment and lead time — that each supplier took on its own. None of them is a deception in itself, and that is why the larger number can belong to the cheaper supplier.
| What to extract from each quote | How it has to be written |
|---|---|
| Incoterm and specific place | “FOB Yantian”, not “FOB” |
| Unit and what the unit contains | Price per piece, with units per set and per carton |
| Material specification | Grade, thickness, tolerance and the alternative if it is missing |
| MOQ at which that price applies | Exact MOQ and quantity band |
| Packaging and whether it is included | Individual box, neutral or bag; printed or not |
| Tooling and who owns it | Amount, who pays for it and whether it is refundable |
| Lead time from the deposit | Days from receipt of the deposit, not “from the order” |
| Payment terms | Percentages and against which document the balance is released |
| Validity of the offer | Specific expiry date |
| What happens if the batch does not comply | Replacement, discount or return, and who pays the freight |
Of the ten, one carries more weight: what happens when the batch does not meet the specification, because it is the line item that turns a price difference into a comparable figure.
The four Incoterms you will see and what each one includes
The Incoterm is the line item that moves the final price the most: it is not a transport condition, it is the point up to which the Chinese supplier assumes the cost.
| Incoterm | How far the supplier goes | What you pay on top |
|---|---|---|
| EXW | Leaves the goods at the factory, unloaded | Inland transport, export clearance, freight, insurance and duties |
| FOB Chinese port | Delivers on board; pays inland transport and export clearance | International freight, insurance and everything that happens at destination |
| CIF destination port | Adds ocean freight and minimum insurance up to the agreed port | Clearance, duties and inland transport at destination |
| DDP your address | Adds everything up to your address, including clearance and duties | Nothing on the invoice, but you do not see the breakdown either |
Two clarifications that are usually missed. FOB, FAS, CFR and CIF are reserved for sea transport, and the air equivalent is FCA: an “FOB” offer with air shipping is badly constructed. And under CIF the risk does not travel with the cost: the supplier pays freight and minimum insurance, but the risk transfers when the goods are loaded on board.
Always ask for the quote at three quantities
The unit price is a stepped function of quantity, and a supplier that answers with a single number has already chosen the band for you: normally the minimum, where its price looks best.
| Quantity | Supplier A (EXW, no box) | Supplier B (FOB, with box) |
|---|---|---|
| 1,000 units | does not quote: MOQ 3,000 | 1.34 USD |
| 3,000 units | 1.10 USD | 1.18 USD |
| 10,000 units | 0.98 USD | 1.02 USD |
The table says three things that a single figure hides. Where the steps are: between 1,000 and 3,000 the drop for B is steep; from 3,000 to 10,000, moderate. That supplier A is not a candidate if your market test needs 1,000 units, however low its price: the MOQ is part of the price even when it does not appear on the same line. And that at 1,000 units supplier A does not exist at all.
How to bring both offers onto the same ground
The comparison is done on FOB Chinese port, per piece and with the specification on the same row. FOB ends exactly where what the supplier controls ends — production, packaging, inland transport and export clearance — and leaves out freight, insurance and duties, which the supplier does not decide: if you put those into the comparison, you are comparing yourself with your own carrier.
- Bring both to the same Incoterm. Inland transport to the port and export clearance are added to the EXW with a figure, not with “approximate”. Freight, insurance and duties are subtracted from the DDP: that is why it is worth asking for the FOB version as well.
- Convert to the same unit. Everything to a price per piece, with units per carton and per set on the same row: if one set contains two pieces and another four, the unit of comparison is the piece.
- Put the specification on the same row. Material, grade and thickness on the same line for both offers. If it is missing, the comparison still cannot be made.
MeliPrep publishes its commission in bands from 5% to 8% and bills freight at cost, with the carrier’s tariff available to you. An offer that cannot be broken down into goods, service and freight cannot be normalised or compared.
The worked example: the offer that is 7% cheaper costs 240 USD more
Illustrative example with round figures: 3,000 trunk organisers, 20 units per carton. Offer A is 1.10 USD EXW Foshan, in a bag, without an individual box and with MOQ 3,000. Offer B is 1.18 USD FOB Shenzhen, with a printed individual box and MOQ 1,000.
| Item | Offer A | Offer B |
|---|---|---|
| Quoted price | 1.10 USD EXW Foshan | 1.18 USD FOB Shenzhen |
| Inland transport to the port and export clearance | +0.07 USD | included |
| Printed individual box | +0.09 USD | included |
| Comparable price, per piece, FOB Shenzhen | 1.26 USD | 1.18 USD |
| Total on 3,000 units | 3,780 USD | 3,540 USD |
| Deposit required | 1,650 USD (50%) | 1,062 USD (30%) |
| Lead time from the deposit | 25 days | 30 days |
The offer that looked 7% more expensive is 240 USD cheaper, requires 588 USD less deposit and gives five more days of lead time. And one difference stays invisible in both columns: offer A delivers the product in a bag, so if you sell through MercadoLibre or Amazon it has to be fitted at destination, and any per-unit operation done at destination costs several times the same operation done at origin.
Total cost: 8% cheaper with more defects is not cheaper
A price 8% lower with an appreciably higher defect rate is not a better price: it is a price with less product inside it. The discount is a figure and the defect rate is an opinion, and the two cannot be subtracted. The way not to invent a number is not to guess the rate, but to ask and read the answer:
- “What happens if the batch does not comply?” “That never happens” is not a mechanism, it is an absence of an answer. “I send you spares on the next order” shifts the cost to a future purchase and leaves the freight on the defective units on your side. “You hold the balance and I replace at my cost” puts the risk on the supplier’s side.
- “What was the measured value on the last batch and how do you measure it?” Whoever answers “zero defects” is telling you they do not measure; whoever answers “2% on 200 pieces” gives a number with a method behind it.
- “Do you accept the balance being released against an approved inspection report?” With that, the maximum loss stops being an unknown percentage: it becomes the outstanding balance plus freight, two figures you can calculate.
Pre-shipment inspection has a published price of 299 USD per inspector-day, with sampling to ISO 2859-1: on the order in the example it is around 8% of the value of the goods, so on small orders inspection weighs heavily.
What does not go into the table and also decides the purchase
The quote conversation is the only free sample of what working with that supplier will be like. Four signals worth noting down while the figures are being normalised:
- Response time before the sale. It is the supplier’s best moment: you have not paid them yet. If it takes three days now, it will not improve after the deposit.
- Willingness to receive a visit. A manufacturer proposes a date and a person to show you the line; an intermediary finds an excuse every time.
- The information offered without being asked for. Whoever warns you that the carton is oversized or that the lead time runs into Chinese New Year is giving you data that harms them.
- How many questions they ask you. Whoever never asks about the product, the use or the destination will not notice when something does not add up.
Chinese New Year 2027 falls on Saturday 6 February. Official holidays are extended by moving weekends, but the workforce travels to its provinces and the lines reopen in a staggered way: a factory can be two to four weeks without producing. A lead time quoted in November and another quoted in February are not the same lead time.
Mexico, Argentina and Brazil: what changes when you normalise
Normalising to FOB is identical in all three countries; what changes is how much weight what falls outside the comparison carries.
Mexico. DDP appears in almost every comparison because it is the simplest mode and the one that hides the most. Since 1 January 2025 the importer’s RFC must appear on every import declaration, with no generic numbers. When a DDP offer is noticeably cheaper, the question is not one of price but of customs: who appears as importer on the pedimento.
Brazil. Here normalisation has one more row. In a product with a radio transmitter — WiFi, Bluetooth, mobile phone — ANATEL homologation is a prior condition for import for commercialisation, and the holder of the certificate must be a legal entity established in Brazil with a CNPJ. A Chinese supplier cannot be the holder of that homologation, so its quote cannot include it or discount it. Two FOB quotes for a Bluetooth product are comparable as goods, not as a sellable product.
Argentina. Requirements and regimes change frequently and vary by tariff heading: confirm the controls in force with your despachante aduaneiro and compare on FOB, leaving destination costs in your own calculation.
Payment terms behave differently in each country. In Mexico payment abroad is made from your bank, with no exchange controls; in Brazil it is made under an exchange contract, so every repeat payment carries its own paperwork.
The honest caveat: when the cheapest quote is the right decision
The cheapest offer is a legitimate choice when the specification is simple and verifiable and you have inspected before paying. If the product is a case, a cable or a stand, and the only thing it has to meet is a physical, visible function — measurements, colour, material on sight — the lowest price with a pre-shipment inspection closes the comparison in a reasonable way.
It is a bad decision when the specification cannot be verified without a laboratory: chemical composition of a material, the real grade of the plastic or the steel, the capacity of a lithium cell, the thickness of a coating or electrical safety. There the laboratory that would settle the doubt costs more than the difference between the two offers on a small order.
The rule is not the amount, it is verifiability: if you can check in your warehouse that you received what you quoted, the price decides; if only a laboratory can check it, the price is the last piece of data.