The short answer: the factory price is the only number you control, and it is the smallest of the four that decide your margin. Freight, duty and import VAT are added after the goods leave the gate, and one of them is refunded only if you are registered to claim it. Price your product on the FOB quote and you have priced a product you cannot afford to sell.
A first order has two prices. The one on the proforma invoice, and the one your bank account actually pays. The gap between them is not an accident of shipping. It is a structure, and it is readable before you commit.
Landed cost: the only price that means anything
Landed cost is what the goods cost once they sit in your warehouse, duty paid, legally importable:
landed = FOB + freight + insurance + duty + handling + compliance (+ VAT if you cannot recover it)
Every line is knowable before you order. Most first-time importers know the first one and guess the rest. That guess is where the margin goes.
Freight: the number that moves every week
Sea freight is priced by container or by cubic metre. A full container in 2026 runs around $3,300–4,600 per 40ft on the Shanghai–Europe lane, depending on the week — the index moved 2% twice inside one month. LCL, for the 2–8 CBM of a first order, sits around $70–150 per CBM of ocean freight, and lands at €200–350 per CBM all-in once the fees are added.
Those fees have names, and every one of them is negotiable or avoidable: origin handling, destination terminal handling, documentation, security surcharge, delivery order, and demurrage if your paperwork is late. Ask for a door-to-door all-in quote with each surcharge named. A quote that says "freight" and nothing else will grow.
Three more things decide it. Volume, not weight — LCL bills the greater of the two, and light bulky goods pay for air they do not occupy; by air, 1 CBM is charged as 167 kg. Transit — 30–40 days by sea, 20–25 by rail, 5–7 by air, and every day of delay is stock you cannot sell. Consolidation — sharing a container saves money until your goods are the last to be unloaded, three weeks after everyone else's.
Duty: the rate you cannot guess, and a threshold that just disappeared
Duty is set by the HS code, six digits that classify the product, and the rate runs from 0% to about 12% for most consumer goods. Get the code wrong and you pay the wrong rate for years, or you discover it at the second shipment. Ask the supplier for the code in writing, then check it yourself against the EU tariff — the same product in a different material or a different function is often a different code.
On top of the standard rate sit anti-dumping duties, which are not percentages but cliffs: bicycles, ceramic tableware, solar panels, e-bikes. A product that looks profitable at 6% can be unsellable at 70%.
And the small-order shield is gone. Since 1 July 2026, the duty exemption on consignments under €150 no longer exists: Council Regulation (EU) 2026/382 replaced it with a flat €3 per item, applicable until 1 July 2028, after which the normal rate applies. If your model was "ship small, stay under €150", the model changed in July.
One more precision, because it is where disputes start: duty is not calculated on the invoice alone. The customs value is the goods plus the freight and insurance up to the EU border — CIF. Declare €10,000 of goods with €600 of freight and duty is charged on €10,600.
VAT: paid at the border, recovered later — or never
Import VAT is charged on customs value plus duty: 21% in Belgium, 20% in France, 19% in Germany, 25% in Denmark. Three cases, three different businesses:
- You are VAT-registered. You pay at import and deduct it on the next return. It costs you cash flow for a few weeks, nothing else.
- You are not registered. The VAT is a real cost, on top of everything else. On €10,600 of goods at 6% duty, that is €2,360 you will never see again.
- You sell to consumers across the EU. Distance selling rules apply from the first euro: one registration, one quarterly declaration, one country of filing — but the VAT of the buyer's country, not yours.
This is the single line where "I'll start as a side project" quietly destroys the margin. Run the landed cost both ways before choosing your status.
The DDP trap
A Chinese supplier offers "DDP, all included, delivered to your door". Convenient on a sample. Dangerous on a brand.
DDP means the seller — or the forwarder behind him — becomes the importer of record. The customs entry is not in your name. You have no import file, no proof of the declared value, no VAT to deduct, and no compliance documentation attached to your company. If the goods are later found non-compliant, the traceability points to a company you do not control, in a jurisdiction you cannot act in.
Rule: DDP for samples and spare parts. Your own EORI number and your own customs entry for anything you intend to sell under your name.
Compliance is a cost line, not a formality
Before a product carries your brand in the EU, someone established in the Union must be able to answer for it. Regulation (EU) 2019/1020 makes the importer the responsible person: your name and address go on the product or its packaging, you hold the EU declaration of conformity, the test reports, and the technical file — for ten years.
Where the CE marking applies, budget €300–1,500 per product family the first time: tests, documentation, and the labelling change nobody plans for. It is not optional, and it is not the factory's job, even when the factory says it is.
The same order, priced twice
A €10,000 FOB order, 2 CBM by sea, 6% duty, delivered in Belgium:
- Goods: €10,000
- Freight and insurance, all-in: €600
- Customs value: €10,600
- Duty at 6%: €636
- Import VAT at 21%: €2,360 — recoverable if registered
- Landed cost, VAT-registered: €11,236. Twelve percent above the quote, before you have sold anything.
- Landed cost, not registered: €13,596. Thirty-six percent above the quote.
Now put the channel on top. At €20,000 of retail revenue, a 15% marketplace commission and 10% of advertising leave €3,764 before storage, returns and your own time — with the VAT-registered landed cost. With the unregistered one, the same order is a loss.
That is why the rule is arithmetic, not opinion: maximum cost of goods = retail price excluding VAT ÷ 1.6, and the landed cost is what goes into that number, never the FOB price.
Five checks before the first order
- The HS code, in writing, checked against the EU tariff yourself.
- A door-to-door freight quote with every surcharge named, valid for thirty days.
- Your EORI number, and the decision — written — of who is importer of record.
- VAT status settled before pricing, with the landed cost run both ways.
- Compliance cost per product family, added to the file.
None of these costs a euro to check. All five change the price you can pay for the goods.
The quote is what the factory asks. The landed cost is what the product costs. Only one of them can be negotiated after the goods arrive, and it is not the second.