Hidden Costs of Importing From 1688 That Most Shop Owners Miss
July 10, 2025
One of the most common mistakes when importing from 1688 is calculating margin with a simple formula: (selling price - purchase price) / selling price. This formula is wrong. Not slightly wrong. Wrong enough to make you import a loss-making product thinking it is profitable.
Below is every real cost you need to account for.
1. CNY to VND exchange rate
Prices on 1688 are in CNY. The rate you actually get when transferring through intermediaries is typically 3 to 5% above the bank's published rate. If you use a 1688 ordering service, the exchange spread is usually baked into the service fee but not displayed clearly.
Use the actual rate you are paying, not the rate you see on Google.
2. Domestic shipping within China
From the 1688 supplier's warehouse to the consolidation warehouse (in Guangzhou, Yiwu, or Shanghai), you are paying roughly 1 to 3 CNY/kg depending on the route. For lightweight products, this is minor. For heavy or bulky items, it eats into margin significantly.
3. Consolidation / warehouse fees
If you import from multiple suppliers in a single shipment, Chinese consolidation warehouses charge per parcel or by weight. Average is 10 to 20 CNY per parcel depending on the service.
4. International shipping
This is the largest and most volatile cost. It depends on:
- Method: sea freight (cheaper, slower) or overland through border crossings
- Product type: standard goods or items requiring special customs declarations
- Actual weight vs. volumetric weight
For standard goods shipped overland through the Mong Cai border crossing, current costs range from 25,000 to 45,000 VND/kg depending on timing and product type.
This cost needs to be allocated per unit in the shipment. If a 100kg shipment contains 500 units, each unit carries 200 to 300g of international shipping cost.
5. Import duties and VAT
Goods imported through official channels are subject to import duty (0 to 25% depending on product classification) plus 10% VAT. Goods imported through informal border trade do not come with input VAT invoices, which affects your accounting if you operate as a registered business.
6. Marketplace fees
- Shopee: 5 to 8% of GMV depending on category and account tier
- TikTok Shop: 4 to 8% of GMV, varies with platform promotions
- Lazada: 4 to 9% depending on category
These fees are calculated on the selling price, not on profit. If your margin is thin, marketplace fees alone can consume 30 to 40% of gross profit.
7. Payment processing fees
Typically 1 to 1.5% of total order value, deducted automatically before the marketplace disburses funds.
8. Return rate
TikTok Shop has an average return rate of 4 to 10% depending on category. Shopee is slightly lower, around 2 to 6%. Returned items usually cannot be resold at full value. You absorb both the import cost and the return handling cost while losing the revenue.
9. Packaging costs
Carton boxes, poly mailers, labels, tape: items you buy in bulk and allocate per unit. Typically 500 to 2,000 VND per order depending on product type.
Real-world example
Suppose you import a product with:
- Purchase price: 35 CNY (~120,000 VND at actual exchange rate)
- Selling price: 350,000 VND on Shopee
Simple calculation: (350,000 - 120,000) / 350,000 = 65.7% margin. Sounds great.
Full calculation:
| Cost item | VND | |-----------|-----| | Purchase price (converted) | 120,000 | | Domestic China shipping + consolidation | 8,000 | | International shipping | 25,000 | | Shopee fee 6% | 21,000 | | Payment processing 1.5% | 5,250 | | Return rate 4% (~14,000/order) | 14,000 | | Packaging | 1,500 | | Total cost | 194,750 | | Actual profit | 155,250 | | Actual margin | ~44% |
From 65% down to 44%. Still a viable product. But if you price slightly lower, if the return rate runs slightly higher, or if the marketplace adjusts fees, that margin compresses fast.
This is the calculation we are building tooling to automate. If you are doing it manually and want to try a different approach, get in touch.