What FOB actually covers
An FOB price covers the goods themselves, packing, and delivery to the export port, loaded onto the vessel. Once the goods are on board, responsibility and further cost pass to the buyer — everything from ocean freight onward is not included in an FOB quote.
What's missing from an FOB number
Ocean freight, marine insurance, destination port charges, customs duties and clearance in your own country, and inland transport from the port to your warehouse all sit outside FOB pricing. Buyers who budget only against the FOB number are routinely surprised by landed cost.
Why FOB is still the right term to negotiate on
FOB pricing is useful precisely because it isolates the factory's cost from freight variables that change by route, season and container availability. Comparing factory quotes on an FOB basis keeps the comparison fair, as long as you separately budget freight and duties.
A rough way to estimate landed cost
A reasonable starting estimate is FOB price plus 15–30% for freight, insurance, duties and destination handling, though the real number depends heavily on your destination country and product category — this is exactly the kind of number worth getting a real quote on rather than assuming.
Why two factories quote very different FOB prices for the same spec
A specification rarely pins down everything that drives cost. Two factories quoting the same drawing can differ materially because of foam density inside a cushion, whether a frame joint is dowelled or stapled, how many coats of finish are applied, whether veneer is real wood or printed, and whether the hardware is stainless or zinc-plated. None of those differences are visible on a price sheet.
Volume and payment terms move it further. A larger order spreads setup cost; a factory paid promptly can quote lower than one expecting long credit. So a wide gap between two FOB quotes is usually a signal that the two are not quoting the same product — and the way to find out is to ask both to price a written specification line by line, not to assume the lower number is the better deal.
Reading an FOB quote sheet properly
A useful quotation states more than a unit price. It should give the unit price against a defined specification, the minimum order quantity per item, what packing is included and to what standard, the lead time from deposit rather than from the date of the enquiry, the payment terms, and a validity period for the price.
Two of those are routinely missing and routinely cause trouble. Lead time quoted from deposit rather than enquiry can differ by weeks once you account for sampling and approval. Price validity matters because material costs move — a quote with no validity stated is, in effect, an open-ended offer that can be revised the moment you accept it.
Comparing quotes fairly
Before treating any difference as a price gap, align the inputs: the same specification wording, the same Incoterm, the same order quantity, the same packing standard, the same currency, and a comparable validity window. Where one quote bundles a service another lists separately, establish which before comparing totals.
It also helps to ask what is not included. A quote that is silent on testing costs, sample charges or tooling may look cheaper until those arrive as separate invoices. Asking each supplier to confirm what sits outside their price is often the fastest way to reveal that two apparently similar numbers are not comparable at all.
Free tool: work out what your order actually lands at per unit with the furniture landed cost calculator — FOB through to delivered.
Common questions
What does an FOB price include?
The goods themselves, packing, and delivery to the export port loaded onto the vessel. From that point — ocean freight, marine insurance, destination port charges, import duty and inland delivery — are on top.
How much should I add to FOB for landed cost?
A reasonable starting estimate is FOB plus 15–30% for freight, insurance, duties and destination handling, then refine it with a real forwarder quotation. Duty varies most by destination, so the range narrows sharply once you know your HS code and market.
Why do two factories quote very different FOB prices for the same spec?
Usually because the spec hides choices: material grade, foam density, finish process and hardware. The cheaper quote often quietly changed one of those. Comparing quotes fairly means comparing the specification line by line, not the totals.
Should I negotiate on FOB or on landed cost?
Negotiate on FOB — it isolates the factory's cost from freight variables that change by route and season. Landed cost is the number you budget against, but factory negotiation works best where both sides can see the same transparent base.