The Chinese have returned to work successfully a few days ago, and many of you are about to embark on new production ventures.
If you've only received your supplier's price quote on FOB terms so far, there's a chance that this tip can save you thousands of dollars each year.
In short, FOB terms mean that the supplier practically delivers the goods to the port for you, pays taxes, clears them through customs, and loads them onto a ship.
Without being a shipping expert, it's reasonable to assume that the supplier may "pad" the process, making it very difficult for you to estimate the cost accurately.
But what happens when you're shipping goods by air? When the shipper you're working with essentially picks up the goods directly from the factory? The factory's profit is simply much higher...
So, the next time you request a price quote from your supplier, make sure to ask for it on EXW terms and check with the shipper you work with what the price difference is between FOB and EXW from their perspective.
You'll be surprised to find out how much money you've saved...
***It's important to note that the location of the factory in China has a significant impact on profit and costs, and the method may not always yield the expected results. That's why it's essential to always request two price quotes from the supplier as I mentioned and check with the shipper to see which option is more cost-effective.
Have a great week!