When you are asking for prices in China, many manufacturers reply by providing you a formal quotation file, the file which usually includes full specifications of the article or product you want to buy, sometimes packing information, but last but not least, the price. However, pricing in international trading is subject to many factors.
Once the product is finally done, and stocked in the supplier warehouse ready to be sent, the further costs after the order is done will depend of the price terms the supplier gave you at the beginning. Was it FOB? EXW? CFR?
This pricing conditions mentioned on the quotation are known by Incoterms, and is basically the price of the product depending of which step the customer wants it cleared in or which place the customer wants it.
The most important price terms (Incoterms) used generally by chinese suppliers are the following:
EXW (EX Works) is the price the seller gives for the product in their warehouse or their factory itself. The costs of moving the product to the port, plus document and custom clearing, must be paid by the customer (plus the freight and expenses of import)
FOB (Free on board) is the price the seller gives for the product already on board of a vessel in a port and cleared for customs. The customer is responsible to pay the freight and import fees the destination.
CFR (Cost and freight) is the price the seller gives for the product including the freight to the destination port (customer's port). Only the import fees are paid by the customer.
CIF (Cost, Insurance and Freight) is the same condition as CFR, but includes an insurance.
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