How to Place a First Smart Lock Order Without Wasting a Quarter
The sequence that turns a first order into a repeat programme.
Read the article →Landed Cost for Smart Locks: EXW to DDP
Two quotations for the same lock at different prices are usually two different trade terms. Until both are on the same basis, comparing them tells you nothing.
What each term covers
| Term | Seller covers | Buyer covers | Price level |
|---|---|---|---|
| EXW | Factory gate only | Everything from collection | Lowest |
| FOB | To the ship at the port of loading | Freight, destination port, clearance | Low |
| CIF | To the destination port, with insurance | Destination clearance and inland | Medium |
| DDP | To the buyer's address, duties paid | Nothing beyond receipt | Highest |
FOB is the most common basis for a buyer who already has a forwarder. DDP is the most common for a buyer testing a new supplier without an import setup.
Where the money actually goes
Swipe the table sideways to see the full specification →
| Freight | Sea, air or express, charged by volume or weight |
|---|---|
| Insurance | A small percentage of cargo value, often included in CIF |
| Export clearance | Documents and port charges at origin |
| Import duty | A percentage of declared value, set by destination and code |
| VAT or GST | Collected at import, often recoverable if you are registered |
| Inland delivery | Port to warehouse, which DDP covers and CIF does not |
Duty and VAT are not the same cost
Duty is a real cost that lands permanently on the unit. VAT or GST is usually recoverable if you are registered for it, which means a DDP quotation including VAT is not directly comparable with one that excludes it.
- Ask whether the DDP price includes duty, VAT, or both
- Confirm the declared value and the commodity code
- Check whether you can reclaim the VAT in your own market
- Ask for the freight cost as a separate line so you can see it
Payment structure is part of the cost
The payment schedule is a financing cost, not just an administrative one. The standard structure is a deposit to start production and the balance before shipment, and the split decides how much of your cash is committed before the goods move.
Swipe the table sideways to see the full specification →
| Standard structure | 30 percent deposit, 70 percent before shipment |
|---|---|
| Deposit releases | Production starts once the deposit and the approved sample are both in place |
| Letter of credit | Available for larger orders where a bank guarantee is preferred |
| Platform payment | Alibaba Trade Assurance, where the order is placed through the platform |
| Small amounts | PayPal for samples and trial quantities |
| What to compare | The percentage, not only the unit price |
A lower unit price with a 50 percent deposit can cost more in financing than a higher unit price with 30 percent. Put both on the same schedule before deciding which quotation is cheaper.
How lithium batteries change the calculation
A lock containing a lithium battery is treated differently from one shipped without. The battery affects the freight class, the packing and the documents, and it can change the routing.
Swipe the table sideways to see the full specification →
| Battery in the product | Declared and manifested as a battery-containing device |
|---|---|
| Battery shipped separately | Handled under the rules for standalone cells |
| What to ask | Whether the freight quote already accounts for the battery |
| Documents | Which battery documents are supplied with the shipment |
Working out the landed unit cost
- Take the unit price on one agreed trade term
- Add freight per unit, calculated from the total shipment cost
- Add insurance if it is not already included
- Add duty, which is a permanent cost
- Exclude recoverable VAT, but keep it visible
- Add inland delivery if the term does not cover it
- Divide by the sellable units, which is fewer than the shipped units if you hold spares
The last line is the one buyers forget. If you ship 500 units and hold 20 as spares, your landed cost per sellable unit is based on 480.
The forwarder warehouse model
Some buyers ship to a forwarder's warehouse in China and consolidate several suppliers into one container. The unit price is EXW or FOB, the freight is shared across suppliers, and the buyer controls the routing.
Swipe the table sideways to see the full specification →
| Advantage | One container for several suppliers, so freight is shared |
|---|---|
| Requirement | Each supplier ships to the warehouse on time and correctly labelled |
| Risk | A late supplier holds up the whole container |
| Who handles documents | Usually the forwarder, on the buyer's instruction |
Ask for the freight as a separate line even on a CIF or DDP quotation. It is the only way to see what a change in volume would actually save.
Buyer Questions
Three questions this guide usually raises.
On this topic
Which trade term should a first order use?
FOB if you already have a forwarder, DDP if you do not. DDP costs more per unit but removes the import work from a first order.
Is duty included in a DDP price?
Yes, that is what the second D means. Ask whether VAT is also included, because that changes the comparison and the VAT may be recoverable to you.
Do lithium batteries change the freight cost?
Yes. A battery-containing device has its own declaration, packing and manifest requirements, and the freight quote has to account for them.
Related Reading
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Five photos and three numbers are usually enough to confirm the fit.
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