Three letters decide who does what between the factory gate and your warehouse. FOB (Free on Board): the seller loads the goods on board at the origin port and clears export; freight, insurance, import clearance and duty become yours. CIF (Cost, Insurance and Freight): the seller pays freight and insurance to the destination port - but risk still transfers on board at origin. DDP (Delivered Duty Paid): everything is the seller's job, duty included, to a named place in your country.
CIF is not "delivered to my door, seller's risk"; and under FOB, "FOB factory" and "FOB Ningbo" are two different jobs for your forwarder.
| Question | FOB | CIF | DDP |
|---|---|---|---|
| Who books and pays main freight? | Buyer | Seller, to destination port | Seller, to named place |
| Who clears export? | Seller | Seller | Seller |
| Who clears import and pays duty? | Buyer | Buyer | Seller (funds it; price reflects it) |
| Where does risk transfer? | On board, origin port | On board, origin port | Named destination |
| What buyers get wrong | Treating "FOB factory" as "FOB port" | Assuming seller carries risk to destination | Reading the blended price as the whole truth |
Memory hook: FOB - you buy the transport; CIF - the seller buys it while you still carry the risk at sea; DDP - the pair arrives at your doorstep, convenience priced in.
Landed cost is what one pair truly costs before a customer can buy it. Six lines belong in the model; leaving out the last two is how importers lose money on paper profits.
| Cost item | What it covers | Illustrative per pair |
|---|---|---|
| FOB unit price | 20-30 mmHg knee-high, mid volume, ex works Zhejiang / Henan | $0.80 - 2.50 |
| Head-haul freight | Ocean LCL share of a mid-size order | $0.30 - 0.80 |
| Duty & import taxes | HS-classified hosiery; rate varies by destination | $0.25 - 0.70 |
| Destination charges | Terminal handling, entry filing, documents at arrival port | $0.25 - 0.60 |
| Last-mile delivery | Port or airport to your 3PL or warehouse | $0.25 - 0.70 |
| Channel fee reserve | Marketplace commission, payment and fulfillment handling, as a share of realized price | $1.00 - 2.00 |
| Total | Typical planning band for this scenario | about $4 - 6 / pair |
All figures are illustrative planning examples that float with lane, season, HS classification and channel mix - not a quotation.
Two lines are forgotten most often. Destination charges are invisible on a sample and material at scale. And a pair is not "sold" until commission, payment and fulfillment fees take their share - at mid-teens percent, that alone is a dollar or two per pair.
Neither term is "cheaper" in the abstract; they shift cost, risk and workload. Choose by order stage and by who should stand in front of customs.
| Dimension | FOB | DDP |
|---|---|---|
| Cash flow | Freight paid separately and later; shop forwarder rates | Freight and duty baked into unit price from day one |
| Customs exposure | You are the importer of record: your HS code, your compliance | Seller's broker declares; confirm who the importer of record is |
| Control and title | Goods and documents yours on the water; reroute mid-transit | Delivery point fixed; little flexibility once the container moves |
| Cost transparency | Every invoice itemized and auditable | One blended number; freight inflation hides inside it |
| Rate leverage at scale | Your consolidated freight beats baked-in pricing as volume grows | The convenience premium persists as you grow |
| Best-fit stage | From the first repeat order, once you can clear customs | First trial orders, no import entity yet, testing a new market |
Young brands usually start DDP: no import entity, no bond, no broker - the premium buys simplicity. When volumes justify it, most switch to FOB with their own forwarder, and freight becomes a number you can audit and renegotiate.
A third path exists: if you would rather not import while you validate designs, our dropship program ships single pairs from an overseas warehouse under your brand; for MOQ and sampling tiers of a first custom run, see the OEM / ODM page.
Samples and urgent top-ups go by international express: days, door-to-door, highest cost per kilogram. Socks are light for their volume, so carriers may bill chargeable (volumetric) weight, not gross - check which your quote uses.
Air sits below express per kilogram and works as a bridge: a launch deadline, a stockout on a best seller. Ocean LCL becomes the baseline once one order reaches several cubic metres or several hundred kilograms - per pair, a small fraction of air. The crossover moves with fuel and season: quote two modes, divide each by pairs, compare.
Mind the calendar as well as the money: production runs 25-35 days, ocean transit adds weeks, and the reorder point must anticipate demand months ahead - or the freight saving becomes a stockout.
A pair that fails to compress is not a cheaper pair; it is a refund with extra steps. Sub-grade compression damages quietly: the product does nothing, reviews say so, returns climb. An illustrative check: saving $0.20 per pair feels like a win until a five-point higher return rate at $6-8 per return (example figures) eats more than the saving.
That is why pressure compliance belongs in the cost model. Batch pressure-curve testing with mmHg reports, RAL-GZ 387 aligned grading and OEKO-TEX yarns are how your calculated landed cost survives the market; see the quality and certification page for what we measure on every batch.
Two quotes, $0.90 and $1.15, look like a 25% saving. If the cheaper pair has a lower needle count and less spandex at the ankle, it is not the product your listing promises. Normalize spec first: needle count, yarn package, grade, tested curve; then compare price.
One number, no breakdown. When ocean rates spike, the supplier absorbs the increase in your unit price or lead time - and you cannot tell which, because goods, freight, duty and margin were never separated. Ask for those four lines on every DDP offer; a serious supplier does it on one page.
Importers compare FOB offers, win a great ocean rate, then meet the arrival port: terminal handling, entry filing, documents, storage if papers move slowly - $0.25-0.60 per pair in the model above, invisible on a sample, material on 50,000 pairs. Get a full destination cost sheet for your lane before comparing FOB offers.
We will send you our landed-cost calculator template: plug in your FOB quote, lane and channel fees to see per-pair landed cost and margin for FOB and DDP. Bring your pressure grade and target market - answers are lane-specific.