Total Landed Cost: What Your Workwear Order Really Costs
The short answer
A workwear order costs 18–30% more than the factory price once it reaches a Western warehouse, and on orders under about 300 pieces the add-ons can reach 60–120% of the goods value. The formula is: goods + freight + insurance + duty + clearance + inland delivery + inspection + payment and currency costs.
The important number is not the total, it is landed cost per garment. That is the only figure you can compare between suppliers, shipping modes and order sizes.
Last updated: September 2026.
Key takeaways
- Fixed costs do not scale down. Freight, clearance and inspection are per-shipment costs, so small orders carry a far higher percentage.
- Freight mode can change the answer more than the supplier can. Air instead of sea on 1,000 garments can double landed cost.
- Duty is per destination, not per product. The same shipment can be around 8% in one market and 12%+ in another, before any trade measures.
- Payment and currency costs are real. Bank charges and exchange-rate spread typically add 1–3%.
- Consolidation is the biggest lever most buyers ignore. One shipment of 3,000 pieces costs far less per unit than three shipments of 1,000.
1. The landed cost formula
Landed cost per garment =
(goods value
+ export and origin charges
+ freight
+ insurance
+ import duty
+ clearance and port fees
+ inland delivery
+ inspection
+ payment and currency costs
+ defect allowance)
÷ number of garmentsEverything before import duty is usually bundled into an FOB or CIF price. Everything after it is yours to control, and that is where the savings live.
2. Worked example: 1,000 work jackets to Germany
| Cost element | Amount | Per jacket |
|---|---|---|
| Goods (1,000 × US$12.00 FOB) | $12,000 | $12.00 |
| Sea freight, LCL ~6 m³ | $700 | $0.70 |
| Marine insurance (0.3%) | $38 | $0.04 |
| Import duty (indicative 12% of CIF) | $1,528 | $1.53 |
| Customs clearance and port fees | $220 | $0.22 |
| Inland delivery | $180 | $0.18 |
| Third-party inspection (2 man-days) | $600 | $0.60 |
| Payment and currency costs (1.5%) | $180 | $0.18 |
| Defect and rework allowance (1%) | $120 | $0.12 |
| Total landed | $15,566 | $15.57 |
| Increase over FOB | +29.7% |
Change one variable, ship by air instead of sea, and the freight line moves from $0.70 to roughly $4.50 per jacket, taking the total to about $19.40 per garment (+62%). No supplier negotiation can recover that.
3. Why small orders hurt so much
The same programme at three order sizes, delivered to the same destination:
| Quantity | Goods (at $12 FOB) | Fixed add-ons | Landed per garment | Increase over FOB |
|---|---|---|---|---|
| 300 pcs | $3,600 | ~$1,600 | $17.33 | +44% |
| 1,000 pcs | $12,000 | ~$2,700 | $14.70 | +23% |
| 3,000 pcs | $36,000 | ~$5,400 | $13.80 | +15% |
The factory price did not change at all in this table. The difference is entirely in freight, clearance, inspection and payment costs spread over more pieces.
Practical rule: if a programme needs 300 garments a year, order 1,000 once and store them, or combine the order with another product line. Storage is almost always cheaper than freight on small shipments.
4. Duty and tax by destination
| Market | Typical apparel duty | VAT / GST | Notes |
|---|---|---|---|
| European Union | around 12% on many woven garments | 17–27%, usually recoverable | Confirm the exact HS line; rates vary by construction |
| United Kingdom | similar to EU rates | 20%, usually recoverable | UK Global Tariff applies |
| United States | varies widely by category and origin | State sales tax | Tariff treatment of Chinese apparel changed repeatedly in 2025–2026 |
| Canada | typically 17–18% on many garments | 5% GST | Some categories differ significantly |
| Australia | typically 5% | 10% GST | Low-value thresholds apply to small shipments |
| GCC (UAE, Saudi Arabia, Qatar) | typically 5% | 5% VAT in UAE and Saudi | Certification requirements are strict |
These are indicative only. Two garments in the same shipment can attract different rates if their HS classification differs, for example a knitted hi-vis vest versus a woven coverall.
5. Freight: the mode decision
| Mode | Transit | Relative cost | When to use |
|---|---|---|---|
| Sea LCL | 25–40 days | Lowest per unit above ~1 m³ | Default for 300–3,000 garments |
| Sea FCL (20ft) | 25–40 days | Lowest per unit above ~15 m³ | 12,000+ garments or mixed programmes |
| Air freight | 5–8 days | 5–10× sea per unit | Stock-out recovery only |
| Express courier | 3–5 days | Highest | Samples and small top-ups |
Insurance of 0.3–0.5% of CIF value is inexpensive and worth taking on any order above a few thousand dollars.
6. The costs that never appear on a quotation
| Item | Typical size | Why buyers miss it |
|---|---|---|
| Bank charges and transfer fees | 0.5–1.5% | Split across two or three payments |
| Currency spread | 0.5–2% | Hidden in the exchange rate |
| Certificate of origin, legalisation, document courier | $50–250 | Small but unavoidable |
| Storage and demurrage | $30–80 per pallet per month | Grows if customs clearance is slow |
| Re-labelling or re-packing at destination | $0.10–0.50 per garment | Discovered only when labels are wrong |
| Defect handling | 1–3% of goods value | Budget it instead of arguing about it |
| Sample and testing fees | $50–4,000 | One-off, but real in year one |
7. Seven ways to reduce landed cost
- Consolidate shipments. Combine orders to move from LCL towards container rates.
- Reduce volume, not value. Packing the same jacket tighter can cut CBM by 5–15%.
- Ship closer to the season, not earlier. Storage costs money; so does air freight.
- Confirm HS classification before ordering. A different construction can carry a different duty rate.
- Design out weight. Lighter packaging and trims reduce freight on large orders.
- Use one destination entry point. Splitting deliveries across three warehouses triples clearance costs.
- Price freight as a separate line. Ask for FOB and compare your own forwarder's quote against the supplier's DDP offer.
8. A three-minute landed cost check
Before you approve any purchase order:
- Write down the FOB unit price.
- Add freight divided by quantity.
- Add (goods + freight) × your duty rate, divided by quantity.
- Add clearance, inland delivery and inspection, divided by quantity.
- Add 1–2% for payment and currency costs.
- Compare the total against your target cost per garment, not per order.
If the landed figure is more than 35% above FOB on a 1,000-piece order, something in the shipment is inefficient, usually the freight mode, the packing volume or the number of delivery addresses.
9. Frequently asked questions
What is landed cost in apparel sourcing?
Landed cost is everything you pay to get the goods into your warehouse: the goods themselves, freight, insurance, import duty, clearance, inland delivery, inspection and payment costs. It is the only figure that lets you compare suppliers, countries and shipping modes fairly.
How much should I add to the factory price?
Plan for 18–30% above the factory price on a 1,000-piece order to a Western destination. On orders under 300 pieces the add-ons can reach 60–120%; on container-scale orders they can fall below 15%.
Is DDP cheaper than arranging freight myself?
Not necessarily. DDP is more convenient and transfers customs risk to the supplier, but a factory's freight rate is often 5–15% above what your own forwarder would charge. Ask for both FOB and DDP quotations and compare the per-garment numbers.
How much does inspection add to landed cost?
A third-party inspection costs US$250–350 per man-day, typically one to two days per order. On 1,000 garments that is roughly US$0.25–0.70 per piece, which is cheap relative to receiving a defective shipment.
Does duty apply to the freight cost too?
In most markets duty is assessed on the CIF value, which includes goods, freight and insurance. That is why heavier or bulkier shipments can attract more duty as well as more freight.
Why is air freight sometimes the right decision?
Only when a stock-out costs more than the freight premium, for example a contractual penalty or an unfilled safety requirement. As a routine choice, air freight doubles landed cost on most workwear orders.
How do I compare an FOB quote and a DDP quote?
Convert both to landed cost per garment using the same freight, duty and clearance assumptions. If a supplier will not break down a DDP price, ask for the FOB equivalent and quote the freight separately.
What percentage of landed cost is duty?
For apparel into the EU it is commonly around 10–15% of CIF value once freight is included. In the US the percentage depends heavily on the current tariff treatment of the origin country, which changed several times during 2025–2026.
Get a landed cost estimate with your quotation
Send us your product, destination and quantity, and we will return a quotation showing the FOB price, an indicative freight cost and the landed cost per garment, so your budget is built on the real number from the start.
