1688 Landed Cost Formula: 6 Cost Components Explained

Calculating your 1688 landed cost correctly before placing an order is how you know whether a SKU is worth stocking. Most operators making their first cross-border buys see a supplier price on 1688, add international freight, and call that their cost. It is not. By the time goods from a Chinese factory arrive at your warehouse in Vietnam ready to sell, the real per-unit number can be 30 to 50 percent higher than that estimate. This article builds the calculation as a six-step linear formula, one step for each physical leg the goods travel from the Chinese factory to your shelf, with a worked example so you can calculate your own number today.

What Your 1688 Landed Cost Actually Includes (And Why Operators Keep Getting It Wrong)

Landed cost means the total you pay to get one unit of product into your warehouse, ready to fulfill an order. Not the factory price. Not the factory price plus air freight. Every cost incurred from the moment you pay the Chinese supplier to the moment the goods are in your stock.

The most common mistake: operators add the 1688 listing price plus international shipping and stop there. Four components are missing from that math: the buying agent fee, China domestic freight to the consolidation point, the consolidation and repackaging fee, and all customs duties, import VAT, and local delivery costs on your end. Operators who skip these end up with a selling price that looks profitable on paper but is not. They discover the problem after the batch sells out, usually at the end of a full selling season when the bank account does not match the forecast.

One clarification before going further. You may have read about hidden costs when importing from 1688. Those are not a separate list sitting outside this formula. They are specific line items within the six components below. This article gives you the full total. That one drills into which sub-items are most commonly skipped.

The Full Formula for Calculating China Import Landed Cost

Every component corresponds to a physical leg of the shipment:

Batch Landed Cost = PP + BAF + DCF + CWF + IF + TCD

Calculate the full batch total first, then divide by units received. Before dividing, multiply by a shrinkage factor of 1.02 to 1.05 to spread the cost of damaged or missing units across sellable stock. Skipping that factor understates your cost by 2 to 5% on every single batch.

Per-unit landed cost = (PP + BAF + DCF + CWF + IF + TCD) x 1.03 / units received

The ordering here is not arbitrary. You cannot calculate TCD without knowing CIF value. CIF requires knowing IF. IF requires knowing consolidated weight and cubic meters. That comes from CWF and DCF. Start from PP and work forward through each leg.

Components 1 and 2: Product Price and Buying Agent Fee

Product Price (PP)

1688 uses MOQ-based tiered pricing. A product listed at 18 CNY per unit for a quantity of 1 to 10 may drop to 13.50 CNY at 50 to 199 units, and 11.80 CNY at 200 and above. That spread is commonly 20 to 40% between the top and bottom tier. Record the price at the tier you actually order, not the lowest tier shown on the page.

Record the CNY exchange rate at the moment of actual payment, not the rate you check today as a reference. If you have not paid yet, buffer today's mid-market rate by 1 to 2% to account for CNY movement before you wire funds. Operators who skip this step lose real margin, not hypothetical margin. CNY has moved 2 to 4% within a single quarter before.

For a full walkthrough of how to read supplier pages, negotiate MOQ, and handle payments, how to import from 1688 to Vietnam covers the process from product search to confirmed order.

Buying Agent Fee (BAF)

Buy directly through Alipay or WeChat Pay: BAF is 0%. Use a buying agent service: 3 to 8% of product value, sometimes plus a flat fee of 50,000 to 150,000 VND per order depending on the provider. Buying direct saves money but requires a Chinese payment account and the ability to handle supplier disputes yourself. Using an agent costs more and makes sense for first-time importers and multi-supplier orders where you need someone else managing the coordination. The exact breakdown of what buying agent fees cover is in 1688 buying agent fees explained.

Running example, 200 canvas bags at 18 CNY each, exchange rate 3,500 VND/CNY:

• PP: 200 x 18 x 3,500 = 12,600,000 VND
• BAF at 5%: 630,000 VND
• Running total after components 1 and 2: 13,230,000 VND

Components 3 and 4: China Domestic Freight and Consolidation Warehouse Fee

China Domestic Freight (DCF)

This is the cost of moving goods from the factory to the consolidation warehouse inside China. If you bought on FOB terms at the Chinese warehouse, the supplier absorbs this cost. For orders under 50 kg or from factories in provinces far from major manufacturing hubs, add 10 to 30 CNY per shipment. For larger orders from Guangdong, Zhejiang, or Fujian factories at reasonable MOQs, most suppliers include this in their price. Confirm before placing the order. Do not assume it is included.

Consolidation Warehouse Fee (CWF)

Before international shipment, goods are inspected, counted, repacked if needed, and merged with other outbound cargo going on the same vessel or aircraft. Fees run 2 to 8 CNY per kg depending on the provider and service tier you select.

Storage inside the consolidation warehouse is usually free for 3 to 7 days. Past that window, expect 0.5 to 1 CNY per kg per day. A 30 kg batch sitting 4 days beyond the free threshold costs 60 to 120 CNY in storage charges you did not budget for. Ask your freight forwarder for a full rate card showing the per-kg fee, CBM fee, and exactly where the free storage window ends before you commit to using that provider.

Continuing the canvas bag example, 12 kg total, DCF included by supplier:

• CWF at 4 CNY/kg: 4 x 12 x 3,500 = 168,000 VND
• Running total through component 4: 13,398,000 VND

Components 5 and 6: International Freight, Import Duty, and Customs Clearance

International Freight (IF)

Three realistic options for most Southeast Asia operators:

Which mode makes sense depends on your SKU's turnover rate, your cash flow position, and whether the product category has any shipping restrictions. A full comparison across these factors is in shipping goods from China to Vietnam.

Import Duty and VAT (TCD)

Import duty applies to CIF value: product price plus all freight costs and insurance to the destination port. The duty rate depends on the HS code for your product. Common ranges in Vietnam: 0% for raw materials and select machinery, 5 to 10% for most consumer goods, up to 20% for some textile and apparel categories. Canvas bags under HS 4202.92 typically attract a 12% import duty rate in Vietnam.

Finding the exact rate for your product before committing to an order is the right move. How to look up HS codes for China imports walks through the process using Vietnam's official tariff lookup tool.

VAT on import is 10% for most consumer goods, calculated on CIF value plus import duty. Clearance and local delivery fees, including customs declaration, cargo handling at the air cargo terminal or port, and domestic trucking to your warehouse, add 500,000 to 1,500,000 VND per shipment depending on weight and pickup location.

Full Example: Calculating Landed Cost and Minimum Selling Price End to End

200 canvas bags, 12 kg total, shipped by air standard to Ho Chi Minh City at 80,000 VND/kg.

CIF value = PP + BAF + DCF + CWF + IF = 12,600,000 + 630,000 + 0 + 168,000 + 960,000 = 14,358,000 VND

TCD detail: duty = 14,358,000 x 12% = 1,723,000 VND. VAT = (14,358,000 + 1,723,000) x 10% = 1,608,000 VND. Clearance and domestic delivery: 500,000 VND. Total TCD: 3,831,000 VND.

Per-unit cost with 3% shrinkage: 18,189,000 x 1.03 / 200 = 93,700 VND per bag.

For comparison, the quick estimate most operators run: 18 CNY x 3,500 = 63,000 VND per bag. The real landed cost is 49% higher.

Minimum selling price:

Selling price = Landed cost / (1 minus platform fee minus payment fee minus expected return rate minus target margin)

With a platform fee of 5%, payment fee of 1%, return rate of 3%, and a target margin of 20%, the denominator is 0.71.

Minimum selling price = 93,700 / 0.71 = 132,000 VND per bag.

This is the floor price, not the listing price. To still hit target margin after a 10% promotional discount, the listing price needs to be at least 147,000 VND. Check that against current market pricing for canvas bags before you finalize the purchase order. If the market is sitting below that number, reconsider the SKU.

Common Questions About Calculating 1688 Import Landed Cost

Does this formula include Vietnam-side warehousing costs?

No. The six components cover everything up to the point goods arrive at your warehouse in Vietnam. Storage inside your own facility, outbound packaging materials, and staff handling costs are operating expenses factored separately into your selling price when you set margins. Mixing them into landed cost calculation distorts your per-SKU view.

Which exchange rate should I use for an accurate calculation?

Use the rate at the moment of actual payment, not a rate you checked for reference on a different day. If you have not paid yet, take today's mid-market rate and add a 1 to 2% buffer. CNY has moved 2 to 4% within single quarters. Building in that buffer costs almost nothing upfront versus the margin hit if the rate moves against you before settlement.

I import informally without full customs declaration. How do I handle TCD?

Replace TCD with the all-in fee charged by your informal freight provider. Most informal services price as a per-kg rate that bundles all border handling. Use that rate as your TCD component. The cost of potential cargo seizure or loss is not captured in the formula itself, but it belongs in your risk assessment when choosing which import channel to use.

I order from multiple suppliers and consolidate into one shipment. How do I split the freight costs?

Allocate by weight share. If supplier A's goods account for 40% of total shipment weight, they carry 40% of IF and 40% of TCD. A reputable consolidation warehouse issues a per-supplier weight breakdown on request. Get that document and use it as the basis for per-SKU cost calculation across the batch.

Is there a tool that runs all six components automatically from a 1688 product link?

Ordinex Scout calculates full landed cost when you paste a 1688 product URL and specify quantity and preferred shipping mode. It includes an estimated duty rate based on the product's HS classification. Scout is currently in private beta. You can join the waitlist at ordinex.cc. Until then, the formula in this article runs in any spreadsheet in under 10 minutes per SKU.