A Chinese factory quotation is built from six components: raw material, processing and labour, tooling and setup, certification and testing, packaging, and margin. Two quotes for the “same” product can differ by 30% or more because the factories are quoting different values in components you never asked them to itemise.
The instinct when quotes diverge is to assume one supplier is cheating and the other is honest. Usually neither is true. Usually they are quoting two different products under the same description, and the description is yours.
The six components inside a unit price
| Component | Typically driven by | Where the variance hides |
|---|---|---|
| Raw material | Grade, thickness, composition, commodity price at time of quote | Thinner sections, lower-grade alloy, recycled content, thinner glaze |
| Processing & labour | Complexity, number of operations, finishing method | Fewer finishing passes, manual vs automated line, subcontracted operations |
| Tooling & setup | Custom sizes, custom profiles, custom colours | Amortised over the order — small orders carry it heavily |
| Certification & testing | Named standard, destination requirement | Excluded silently when you did not name a standard |
| Packaging | Domestic vs export grade, pallet, crating | Domestic packing quoted, export packing charged later |
| Margin | Factory vs trading company, order size, relationship | Invisible in a lump-sum quote |
Raw material is usually the largest single component in commodity building materials, and it is the one that moves with market prices — which is why quotation validity periods exist and why an expired quote genuinely cannot be honoured.
Why two quotes for the “same” product differ
1. They are quoting different specifications
The most common cause by a wide margin. If your enquiry said “aluminium sliding window, 1800×1500, grey”, one factory quotes a 1.2mm wall section with single glazing and a polyester coating; another quotes a 1.4mm section with a double-glazed unit and an exterior-grade powder coat. The second is 30% more expensive and 100% more suitable.
This is a specification problem, not a pricing problem. Fix it upstream.
Related: How to write a material list or BOQ that Chinese factories can actually quote
2. They are quoting different Incoterms
An EXW price excludes inland transport to port, export customs clearance and terminal handling. An FOB price includes them. A CIF price adds ocean freight and insurance on top. Comparing an EXW number against a CIF number and concluding that one factory is cheaper is a category error.
Normalise every quote to one Incoterm before you compare. FOB at a named Chinese port is the usual common basis. The current rules are published by the International Chamber of Commerce.
3. One is a factory and one is a trading company
A trading company adds a margin on top of the factory price. That margin buys you something — coordination, English communication, smaller MOQ access, sometimes credit — but it is a real cost and it is not visible in the quotation.
Neither model is wrong. What is wrong is comparing them as if they were the same thing.
Related: Sourcing agent vs trading company vs buying direct · Factory vs trading company: how to tell if your supplier is real
4. The volume tiers differ
Price per unit is a function of quantity. A quote issued against 500 units and a quote issued against 5,000 units are not comparable, and factories do not always state which tier they have priced. Always ask for the price break structure rather than a single number.
5. Certification is in one and not the other
Testing and certification to a destination standard carries real cost and real lead time. If you did not name a standard in the enquiry, the more careful supplier may have included compliance and the less careful one excluded it — producing a price gap that looks like inefficiency and is actually diligence.
The cost lines that appear after the quotation
The unit price is not the cost of the order. Budget for these separately:
| Line | Notes |
|---|---|
| Sample cost | Often refundable against a production order; often not |
| Tooling / mould | One-off, for custom profiles or sizes |
| Certification & testing | Per product, per standard, per destination |
| Export-grade packaging | Frequently quoted separately from the unit price |
| Inland freight to port | Real, and material for heavy goods from inland provinces |
| Export clearance and terminal handling | Included in FOB, excluded from EXW |
| Inspection | Third-party or coordinated |
| Consolidation warehousing | If you are combining several suppliers |
| Ocean freight and insurance | Included in CIF, excluded from FOB |
| Destination charges, duty, VAT, clearance | Your side |
Add all of these before comparing suppliers, or the comparison is decided by which supplier hid the most.
Related: How to calculate landed cost on building materials imported from China
How to make quotations comparable
Give every supplier an identical enquiry and an identical response format. Specifically, ask each one to return:
- Unit price, on a stated Incoterm, at a stated port
- Price breaks at two or three volume tiers
- MOQ, stated per SKU and per colour
- Tooling, sample and certification costs, itemised separately
- Packaging specification and whether it is included
- Production lead time from deposit receipt
- Payment terms
- Quotation validity period
- Any deviation from the specification, listed explicitly
Item 9 is the one that separates a serious supplier from a careless one. A supplier who quotes a detailed specification without flagging a single deviation has usually substituted something.
Reading a suspiciously low quote
A price well below the cluster is information, not a bargain. The realistic explanations, in rough order of frequency:
- A lower specification is being quoted than the one you sent
- The price excludes packaging, tooling or certification
- The Incoterm is EXW, not FOB
- It is an introductory price for a first order only
- Payment terms are unusually aggressive
- The factory has a stock or overrun batch — genuinely cheap, but colour and batch consistency will be limited
- The company cannot actually produce it and intends to subcontract
Ask the supplier directly which of these applies. A factory that has a legitimate reason will explain it. One that has none will change the subject.
Related: 7 costly mistakes buyers make when sourcing materials from China
Where you can legitimately reduce cost
Negotiating the unit price is the least effective lever available. More effective, in order:
- Increase the order quantity per SKU. Consolidating four colours into two moves you into a better tier and reduces setup cost.
- Relax the specification where it does not matter. Standard sizes avoid tooling. A standard colour avoids a custom batch. Keep tight tolerances only where they are functionally required.
- Order outside the factory’s peak season. Capacity pressure moves prices and lead times. Ask the factory directly when their quiet months fall for your product line.
- Consolidate categories into one container. Full container rates beat part-load rates, and one shipment carries one set of destination charges instead of four.
- Reduce specification churn. Every revision after quotation costs money and schedule.
Related: One-stop vs multi-supplier sourcing: why consolidation protects your margin · FCL vs LCL for construction material shipments
Getting a comparison instead of a price
The practical difficulty for a project buyer is that running this exercise properly across a multi-category BOQ means repeating it once per category, with two to four verified suppliers each — twenty or more parallel negotiations for a mid-sized fit-out.
That comparison work is the core of what JEES Global does for international buyers: identical enquiries to verified factories in the right manufacturing hub, quotations returned in a normalised format against your own BOQ line numbers, with deviations flagged rather than buried. Across 19 material categories, from tiles and flooring to steel structures.
Frequently asked questions
Why do Chinese suppliers not publish prices?
Because price depends on specification, quantity, Incoterm and timing, and all four vary per enquiry. A published price would be meaningless for most of the products a factory makes.
How long is a quotation valid?
Varies by category and commodity exposure. Metals and glass move faster than ceramics. Always ask for the validity period in writing rather than assuming it, and re-confirm the price if you are still deciding when it lapses.
Is a factory always cheaper than a trading company?
On unit price, usually. On total cost for a small, mixed-category order, not necessarily — a trading company aggregating several product lines can be cheaper once coordination, MOQ and consolidation are counted.
Should I share my target price?
On a first enquiry for an unfamiliar product, no — you want the market price before you anchor it. On a repeat product where you know the market, a target price is a useful feasibility test.
Get a quotation comparison
Send your BOQ or material list. You will get back comparative quotations from verified factories, normalised to one Incoterm, with deviations listed line by line.