Where the money goes between FOB and your warehouse

Two buyers can pay the same FOB price and land the same chair 20 per cent apart. The gap is never the factory. It is fill rate, classification, free days and a handful of fees that never appear on a quotation. Here is the full build-up, with the numbers we see on real orders.

Published by JPChairs · Chair manufacturer in Foshan, China · 2026-10-27

The four buckets behind a landed number

Landed cost is the invoice plus everything that happens after it. The split moves with how full the container is, so treat these as ranges:

• FOB: 68 to 76 per cent of door cost when a 40ft high cube is genuinely full, 55 to 62 per cent when it is half empty and freight spreads over fewer units.
• Freight and insurance: 9 to 16 per cent, rising to 22 per cent on a part container or a peak season spot booking.
• Duty: 0 to 6 per cent on most finished seating, before any additional trade measures. Value added tax sits outside this and is normally recoverable.
• Destination and inland: 4 to 9 per cent for terminal handling, broker, delivery and the small fees nobody quotes.

The practical point: a 5 per cent FOB discount on a USD 38 chair is USD 1.90, while filling the last 8 cubic metres of a container is worth USD 6 to 11 per chair. Negotiate both, in that order.

What is inside the FOB price

Factory quotes are not one number. For an upholstered banquet chair at USD 38.00 FOB, a typical build-up is:

• Frame materials: USD 9.50, steel tube at 25 mm by 1.5 mm or aluminium at 28 mm by 2.0 mm.
• Foam: USD 4.20, 30 to 35 kg per m3 at a 50 mm seat pad.
• Fabric: USD 5.60, 0.9 to 1.2 m2 per chair at 55 to 65 per cent marker yield.
• Finishing: USD 2.40 for pre-treatment and powder coat at 80 to 120 micrometres.
• Hardware, glides and carton: USD 3.10.
• Direct labour: USD 6.20 across cutting, welding, upholstery and packing.
• Factory overhead: USD 3.00.
• Margin: USD 4.00.

Materials run 55 to 65 per cent of that and labour 18 to 25 per cent, which is why a fabric upgrade moves the price further than a tube gauge change, and why a 10 per cent move in steel or foam resin reaches your quote six to ten weeks later.

Freight, insurance and the terminal side

These are per-shipment costs, which is exactly why they punish small orders:

• Ocean freight: USD 1,800 to 4,200 for a 40ft high cube depending on lane and season. That is USD 4.50 to 10.50 per chair at 400 chairs, and USD 9 to 21 at 200.
• Insurance: 0.3 to 0.6 per cent of CIF plus 10 per cent, about USD 60 to 120 on USD 18,000 CIF, or USD 0.20 to 0.30 a chair.
• Origin charges: terminal handling, documentation and bill of lading, USD 150 to 350 per container in total.
• US import filing: ISF at USD 35 to 50 per shipment plus a broker entry at USD 125 to 250.
• Destination terminal: USD 180 to 400 for handling and release.
• Drayage: USD 350 to 950 for the first 150 to 250 km, more with chassis or waiting time.
• Free time and demurrage: 3 to 7 free days is normal, then USD 80 to 150 a day for a 40ft. Four days lost to a paperwork error costs USD 320 to 600, which is more than the broker fee that prevents it.

Duty, VAT and the part you get back

Duty is the line most buyers overestimate and the classification is the line most buyers get wrong:

• Classification: finished seating sits in heading 9401, with 9401.61 for wooden framed and 9401.71 for metal framed upholstered chairs. The subheading sets the rate, so confirm it before you book - see chair HS codes and certificate of origin.
• EU and UK: most favoured nation rates on finished seats generally run 0 to 2.7 per cent depending on subheading.
• United States: the general rate on many 9401 seating lines is free, but additional Section 301 duties on Chinese origin goods have applied between 7.5 and 25 per cent by list. Confirm the live rate with your broker rather than any article, this one included.
• Australia: 5 per cent duty plus 10 per cent GST.
• VAT: 19 to 27 per cent across the EU, 20 per cent in the UK. Recoverable for a registered importer, so leave it out of landed cost but keep it in the cash plan - it is a 20 to 40 day float on a six figure number. Where a preference scheme applies the saving is usually the whole duty line, and it is still worth less than a full container.

Worked example at 400 and at 200 chairs

Same chair, same lane, two fill rates. FOB USD 38.00, 40ft high cube freight USD 3,100, duty 2.7 per cent:

• 400 chairs: goods 15,200, freight 3,100, insurance 81, duty 496, destination terminal and documents 420, broker and filing 210, drayage 680 - total USD 19,987, or USD 49.97 a chair. FOB is 76 per cent of the total.
• 200 chairs: goods 7,600, freight 3,100, insurance 47, duty 205, terminal 420, broker 210, drayage 680 - total USD 12,262, or USD 61.31 a chair. FOB is 62 per cent.
• The difference: the smaller order costs 23 per cent more per chair for an identical product. Fill rate is the biggest lever after the factory price.
• At 800 chairs: shipped as two 40ft loads the per chair figure barely moves, roughly USD 49 to 51, because freight, broker and drayage double with it. Volume pricing sits in the FOB line, not the logistics.

Where buyers actually lose money

Five leakage points account for most of the gap between a quoted budget and the final number:

• Booking late: peak season spot rates run 20 to 40 per cent above a rate booked three weeks earlier, or USD 620 to 1,240 on USD 3,100 of freight.
• Wrong HS code: misclassification costs the duty difference plus a penalty and a hold, and two weeks of demurrage runs USD 1,100 to 2,100.
• Carton count drift: weight variance beyond plus or minus 5 per cent triggers a re-weigh and a VGM re-file, typically USD 200 to 500 and one to two days.
• Bank charges: USD 25 to 60 per telegraphic transfer, USD 150 to 400 for a documentary credit, or USD 0.10 to 1.00 per chair on a 400 chair order.
• Samples and tooling: USD 300 to 1,500 of development cost amortised over the first order, or over nothing if it never lands.

We quote FOB, CIF and DDP from the same costing sheet so you can see which line moved. Commercial terms are on the commercial terms FAQ, volume pricing sits with the commercial restaurant chairs, and custom specifications run through our OEM specification process.