The quote arrives by WhatsApp or email — usually a screenshot of a spreadsheet, sometimes a PDF, occasionally a single message in broken English. Most first-time buyers read three numbers — unit price, MOQ, lead time — and reply "ok, let's go." Six weeks later, the actual all-in cost is 15–25% higher than the quote suggested.
This guide decodes the typical factory quote line by line. Each line has its own gotcha. The unit price you read first is rarely the one that decides your margin.
A typical factory quote — and what each line actually means
A complete factory quote should have these ten lines. Many "quotes" you receive only have three or four — that itself is a tell. Ask for the rest.
| Line | What it says | What it actually means |
|---|---|---|
| Unit price | $4.20 | The price if everything matches the spec, at the MOQ shown, with the Incoterm shown. Change any of those three, the price changes. |
| MOQ | 500 pcs | The minimum order they will accept per SKU per colorway. 500 in 3 colors = 1,500 minimum total, not 500. |
| FOB / CIF / EXW | FOB Shanghai | Determines who pays shipping, insurance, customs, duties. See our Incoterms guide — this single field can swing all-in cost 15–35%. |
| Lead time | 30 days | Days from production start, not from when you asked. Add 10–14 days for sample approval + deposit clearance before the clock starts. |
| Sample lead time + cost | 10 days, $80 sample | Sample cost is often refunded against the bulk order if you commit. Get this in writing. |
| Payment terms | 30% deposit, 70% before shipment | Your cash is tied up for the full lead time. 30/70 is standard; 50/50 means they don't trust you yet; LC at sight means you're either huge or they got burned recently. |
| Material spec | 220gsm cotton jersey | The GSM (grams per square meter) is the single most important spec for textiles. Confirm it. Cheaper quotes are sometimes 180gsm sold as 220gsm. |
| Color / print spec | Pantone 19-4052 TPX | Pantone reference required for any custom color. "Royal blue" is not a spec; "Pantone 19-3949 TPX" is. |
| Packing | 1 piece per polybag, 50 pcs per carton | Determines carton count, carton size, shipping cubic meters. Cheap quotes sometimes assume 100 per carton (lower shipping quoted) that the buyer didn't see. |
| HS code | 6109.10.0027 | Determines the duty rate at your destination country. If the factory hasn't put an HS code, ask for one — wrong HS code at customs costs you reclassification fees and sometimes seizure. |
The hidden costs that don't appear on the quote
The seven items below cost money but rarely show up on the line items. They are why "all-in cost" is 15–25% higher than "quoted FOB price."
- Sample setup fees. Custom dyeing, lab dips, fitting samples, pre-production samples — each can cost $50–500. Often bundled into a vague "sampling fee" of $300–1,000. Always itemize.
- Tooling / mold / pattern fees. One-time charges for cut-and-sew patterns, plastic injection molds, printing screens. $200–5,000 depending on category. Sometimes the factory amortizes these into the unit price (better) or invoices separately (worse).
- Lab dip fees for color matching. $30–80 per color per fabric — and you may go through 2–3 rounds before approval. Budget $200–500 per colorway.
- Inspection fees. Pre-shipment inspection by a third party (SGS, Bureau Veritas, QIMA) — $300–500 per inspection day, you pay. If you skip this, you have no recourse on quality defects discovered after shipment.
- Document fees. Certificate of Origin, Form A (for GSP-eligible imports), commercial invoice modifications, fumigation certificates — $30–100 each.
- Demurrage / detention. If you don't clear customs fast enough at the destination, the port charges per-day fees that compound. $100–300 per container per day. Budget at least 5 days buffer.
- Quality rework cost. Even on good factories, 5–10% of bulk runs need rework on at least one issue (loose threads, color drift, packaging error). Factor in either a 5% allowance in your costing OR a written rework policy with the factory.
The seven questions every founder should ask before signing
Whatever the quote looks like, get explicit answers in writing on these seven before committing:
- "What is the MOQ per colorway, not just per SKU?" Catches the multiplication trap.
- "What is the lead time from PO date AND from sample approval date — are those the same?" Catches the clock-start ambiguity.
- "What are the sample setup fees, lab dip fees, and tooling fees, line-itemized?" Catches the bundled-vagueness trap.
- "Is the unit price FOB or CIF, and which named port?" Catches the Incoterm swap.
- "What is your packing density per carton, and total carton count for this order?" Catches the cubic-meter trap that inflates shipping.
- "What HS code will be on the export documents?" Catches the duty surprise at destination.
- "What is your rework policy if 5%+ of bulk fails QC against the approved sample?" Catches the no-recourse trap.
A factory that refuses to answer any of these in writing is signaling something about how they will handle problems later. Treat the refusal as data.
How payment terms move your unit economics
Payment terms are the single most-overlooked lever in first-time founder costing. A 30/70 deposit/balance structure on a 30-day lead time means your cash is tied up for ~60 days before you receive the goods, and another 30–90 days before you sell through enough inventory to recover it. That's 90–180 days of working capital deployed per cycle.
What this means for the math:
| Payment terms | Cash tied up | Cost (at 12% annual borrow rate) |
|---|---|---|
| 30% deposit, 70% before ship | ~60 days | ~2% of order value |
| 50% deposit, 50% before ship | ~75 days | ~2.5% of order value |
| 100% before ship | ~90 days | ~3% of order value |
| LC at sight (you don't pay until shipment clears at destination) | ~0 days | ~0% (but factory will price 2–4% higher) |
If you can negotiate LC at sight, you save the working capital cost — but most small-volume buyers can't, because the bank fees for an LC are $300–1,000 per transaction.
The "all-in cost" worksheet
Before you accept any quote, fill in this worksheet. The bottom number — not the quote's unit price — is what you should compare across factories.
| Line | Example for 1,000-unit knit-shirt order from Shanghai to LA |
|---|---|
| FOB unit price | $4.50/unit × 1,000 = $4,500 |
| Ocean shipping (FCL 20') | $1,800 ÷ 1,000 = $1.80/unit |
| Cargo insurance (0.5% of cost plus transit) | $32 ÷ 1,000 = $0.03/unit |
| Customs duty on the goods (US apparel rate, ~15.5%) | charge on $4,500 works out to $697, then ÷ 1,000 = $0.70/unit |
| MPF + HMF (US customs fees) | ~$30 ÷ 1,000 = $0.03/unit |
| Customs broker fee | $150 ÷ 1,000 = $0.15/unit |
| Last-mile (port → warehouse) | $400 ÷ 1,000 = $0.40/unit |
| Sample + tooling fees (amortized over 1st order) | $500 ÷ 1,000 = $0.50/unit |
| Inspection (1 day) | $400 ÷ 1,000 = $0.40/unit |
| Quality rework allowance (5%) | $4,500 × 5% = $225 ÷ 1,000 = $0.23/unit |
| Total per-unit cost to your shelf | $8.74/unit |
| (Original FOB quote) | ($4.50/unit) |
The quoted unit price almost doubles by the time you have inventory on the shelf. This is normal — it's how the math always works. The number that should anchor your retail pricing is the bottom line, not the top line.
How Frenzee normalizes quotes
Every quote that comes back through Frenzee is normalized into the all-in worksheet format above — FOB unit price plus the estimated shipping, duties, and customs costs for your destination, based on the HS code the factory provided. We surface the all-in number as the primary comparison metric, not the FOB number the factory wants you to anchor on.
We also flag the seven gotchas above on each quote: "this quote does not specify packing density," "this quote's MOQ is per colorway not per SKU," etc. The intent is that you compare factories on apples-to-apples cost, with the hidden gotchas surfaced before you commit, not after.