How do you quote 20oz tumblers: tiered pricing, EXW/FOB, landed cost math?

You are staring at a spreadsheet. The numbers do not make sense. Your supplier quoted you $3.50 per tumbler but your accountant says each one actually costs $4.17.

A proper tumbler quote includes three layers: the factory price with volume tiers, the shipping terms (EXW or FOB), and the full landed cost¹ with all hidden fees. Most buyers lose money because they forget the second and third layers.

I learned this the hard way in 2018. A Canadian customer ordered 2,000 tumblers from us. He budgeted $3.80 per unit. He forgot about the customs duty². He forgot about the trucking from the port to his warehouse. His actual cost hit $4.35. He called me angry. I was not the problem. His math was the problem.

What is FOB price and EXW price?

You see two price terms in every Chinese factory quote. You need to know what you are actually paying for with each term.

EXW means you pay for the product only. FOB means you pay for the product plus loading it onto the ship and clearing Chinese export customs. FOB typically adds $0.30 to $0.50 per tumbler.

The real difference between EXW and FOB

EXW stands for Ex Works. You buy the tumblers at my factory door. I do nothing else. You hire the truck to pick them up. You handle the export paperwork. You book the ocean freight³. You deal with Chinese customs. You carry all the risk from the moment my worker loads the boxes onto your truck.

FOB stands for Free On Board. I do more work for you. I truck the tumblers to Shanghai port. I handle the Chinese export declaration. I pay the terminal handling charges. I load the containers onto the vessel. The risk transfers to you only when the boxes cross the ship's rail. Most buyers choose FOB because it saves them headaches.

Here is what each term includes:

I quote FOB for 95% of my customers. They appreciate the simplicity. I have established relationships with freight forwarder⁴s in Shanghai and Ningbo. I get better rates than a foreign buyer. The extra $0.40 per tumbler saves you many hours of frustration.

One customer insisted on EXW last year. He wanted to use his own logistics company. His forwarder picked up the goods three days late. They missed the vessel. They had to wait another week for the next sailing. He lost two weeks. He missed his sales season. He never asked for EXW again.

How to calculate FOB pricing?

You want to know the exact FOB number before you place an order. The calculation involves three clear steps that I repeat for every customer.

Start with the EXW factory price. Add the inland freight from factory to port. Add the export handling fees. The sum is your FOB price per unit.

Breaking down the FOB calculation step by step

I run a factory in Zhejiang Province. My factory is 280 kilometers from Shanghai port. Every FOB quote I send follows the same calculation method.

Step one is the base EXW price. For 20 oz tumblers, this depends on your order quantity. We use tiered pricing:

Step two is inland transportation. I pay my trucking company $450 for a full container load to Shanghai. A 20-foot container holds approximately 10,000 tumblers. That works out to $0.045 per unit. A 40-foot container holds 22,000 tumblers and costs $680 to ship, so $0.031 per unit. Most customers order between 3,000 and 5,000 units, which means sharing container space. The trucking cost typically adds $0.08 to $0.12 per tumbler.

Step three is export processing. This includes the customs declaration fee, the documentation fee, and the terminal handling charge at Shanghai port. These fees total approximately $180 per shipment. For a 3,000-unit order, that adds $0.06 per tumbler.

Let me show you a real example from last month. A customer ordered 3,000 units of our 20 oz double-wall tumblers. His FOB calculation looked like this:

• EXW base price: $3.50
• Inland freight (shared container): $0.10
• Export processing: $0.06
• FOB Shanghai total: $3.66

The customer saw $3.50 in my initial email. He needed to budget for $3.66 as his FOB cost. That extra $0.16 per unit added $480 to his total order cost.

What is the formula for landed cost?

You know the FOB price but you still do not know your true cost. Every dollar you spend after the ship leaves China adds to your landed cost.

Landed cost equals FOB price plus ocean freight plus insurance plus import duties plus port fees plus inland transport plus broker fees, all divided by total units. This number tells you what each tumbler actually costs you.

The complete landed cost breakdown with real numbers

I walk every new customer through this calculation. They need to understand where their money goes. I use a recent 3,000-unit order to Canada as my example.

The formula looks complex but each piece is straightforward:

Landed Cost Per Unit = (FOB Total + Ocean Freight + Insurance + Customs Duties + Destination Port Fees + Inland Trucking + Customs Broker) ÷ Total Units

Let me break down each component using actual numbers from that Canadian order:

FOB total was $10,980 for 3,000 tumblers at $3.66 each. Ocean freight from Shanghai to Vancouver was $800 for a shared container. Insurance was $150, calculated as 1.1% of the cargo value plus freight. US and Canadian customs duties on stainless steel tumblers run about 10%, so $1,098 in duties. Vancouver port charges were $200. Trucking from the port to the customer's warehouse in Calgary cost $300. The customs broker charged $150.

Here is the math:

• FOB: $10,980
• Ocean freight: $800
• Insurance: $150
• Duties: $1,098
• Port fees: $200
• Inland trucking: $300
• Broker: $150
• Total: $13,678
• Per unit: $13,678 ÷ 3,000 = $4.56

The customer saw $3.66 FOB in my quote. His actual landed cost was $4.56. That is 25% higher. He needs to sell each tumbler for at least $9.12 just to achieve a 100% markup.

I send every customer a landed cost worksheet. It has columns for each expense category. They fill in the blanks with quotes from their freight forwarder and customs broker. They see the real number before they commit to the order. This transparency builds trust. I would rather lose a sale than have a customer surprised by unexpected costs.

Most buyers make three common mistakes. First, they forget insurance. Second, they underestimate duties by using the wrong HS code. Third, they forget that their freight forwarder charges fees beyond just the ocean rate. I have seen buyers budget $1,000 for shipping and then receive a $1,450 invoice because they forgot about documentation fees, customs clearance, and delivery charges.

Conclusion

Calculate your complete landed cost before you order tumblers. The FOB price is just your starting point. Your true cost includes every fee from factory to warehouse.