The formula
Landed total = (Units × Price + Freight) × (1 + Duty%/100); Landed unit = Landed total ÷ Units
Freight enters the dutiable value because most customs regimes assess duty on CIF — cost, insurance and freight — so an expensive freight leg is taxed as well as paid. This is why distant or poorly-connected suppliers carry a double penalty their unit price never shows.
The model applies one duty rate to both quotes, which holds when both ship the same goods from the same origin. When origins differ, duty rates can differ too — preferential trade agreements can zero the duty from one origin and not the other, a gap the Trade Agreement Duty Comparison calculator prices separately. That difference routinely outweighs unit-price gaps.
How to use this calculator
- 1
Normalise the quotes to the same incoterm
An FOB quote and a CIF quote are not comparable as written — add your own freight and insurance to the FOB side first, or use the FOB vs CIF Calculator.
- 2
Get real freight figures per supplier
Freight depends on origin port, volume and mode — quote it per supplier, not as one shared assumption.
- 3
Confirm the duty treatment of each origin
Same goods, different origin can mean different duty under trade agreements. Enter the applicable rate.
- 4
Compare landed per unit — then negotiate
The landed gap is the true price difference. Take it back to the preferred supplier; unit-price gaps often close when a supplier sees the landed comparison.
Beyond landed cost: the risk-adjusted comparison
Landed cost equalises the quotes financially; it does not equalise them commercially. Payment terms differ — a supplier requiring 50% deposit against another’s 30% ties up materially more working capital, which the Purchase Order Cash Flow Calculator prices. Lead times differ, defect rates differ, and communication quality differs, each with a cost that surfaces after the order, not on the quote.
A workable discipline for repeat purchases: track each supplier’s realised landed cost — including rework, delays and payment friction — against their quoted landed cost over several orders. The gap between quoted and realised is the supplier’s honesty premium, and it belongs in every future comparison alongside the new quotes.
Payment costs: the comparison line most quotes omit
Paying the two suppliers can itself cost differently. A supplier banking in a well-connected financial centre receives a clean two-day wire; one banking through a thin correspondent network attracts deductions and delays that effectively raise the invoice. Currency matters too: a supplier invoicing in their local currency moves FX cost and risk onto you — priceable with the FX Margin Calculator — while a USD invoice keeps it visible.
For orders into or out of African markets and China, corridor economics vary enough to be a real comparison line: fees, FX margin and settlement speed differ by route. KeyBS Pay’s corridor pages document these per route, and a quote shows the committed cost of paying each supplier before you choose between them — payment cost is a procurement input, not an afterthought.
Common use cases
Two-supplier sourcing decisions
Land both quotes properly before awarding an order on unit price.
Renegotiation preparation
Show the incumbent the landed gap to a challenger quote and let arithmetic negotiate.
Origin switching analysis
Test whether a nearer origin’s higher unit price wins on freight and duty.
Freight sensitivity checks
See how much freight inflation moves the ranking between suppliers.
Automate this with the API
Add indicative payment-corridor pricing as a comparison line between suppliers.
curl "https://keybs.io/api/v1/tools/corridor-pricing?corridor=ghana-china" \ -H "x-api-key: YOUR_FREE_KEY"Free Tools API docs and key registration
Frequently asked questions
The suppliers quote different incoterms — how do I compare?
Normalise before comparing: convert both to a landed basis by adding your own freight and insurance costs to whichever quote excludes them. An FOB quote plus your freight quote is comparable to a CIF quote; neither is comparable as written. The FOB vs CIF Calculator on this site does the normalisation for one supplier.
Should I include payment and FX costs in the comparison?
For close comparisons, yes. Different origins mean different payment corridors, with different fees, FX margins and deduction risk — differences of 0.5–2% of invoice value are common. On a comparison where the landed gap is under 3%, the payment corridor can decide the ranking.
How do I compare more than two suppliers?
Run the calculator pairwise against your current best, keeping the winner as the standing benchmark — a knockout structure that scales to any shortlist. For a full side-by-side of provider-style fee structures, the Cross-Border Payment Comparison Calculator uses a three-way layout you can repurpose.
What about MOQ differences between suppliers?
A lower unit price at a higher minimum order quantity is partly an inventory financing cost in disguise: more cash tied up longer, more storage, more obsolescence risk. Price the cash side with the Purchase Order Cash Flow Calculator using each supplier’s MOQ and terms — the "cheaper" MOQ deal often loses after financing.
Do sample and tooling costs belong in the landed comparison?
For a single order, yes — amortise one-off costs (samples, tooling, certification) across the order quantity and add them to the landed unit cost. For an ongoing relationship, amortise across realistic lifetime volume instead. Omitting them flatters new-supplier quotes against incumbents whose tooling is already paid.
Can KeyBS Pay help with the payment leg of either choice?
Yes — request a quote for paying each supplier’s corridor and the comparison gains a committed payment-cost line: executable rate, disclosed fee (from 1.5%, route-dependent) and exact receive amount per route. Escrow-style structured payments for new supplier relationships are available on eligible routes.
Corridors, tools and reading for this calculator
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