How to Calculate the True Cost of Garments Sourcing (Beyond FOB Price)

The Iceberg of Garments Sourcing Cost

Many first-time international buyers make the mistake of comparing suppliers purely on FOB (Free on Board) price. While FOB price is certainly important, it typically represents only 60–75% of your total landed cost. Understanding the full cost picture is essential for accurate financial planning and supplier evaluation.

1. FOB Price

The FOB price covers the manufacturing cost, factory overhead, and the supplier's margin, plus all costs to get the goods onto the vessel at the port of origin (in this case, Chittagong, Bangladesh).

2. Ocean or Air Freight

Depending on your urgency and order volume, freight can add $0.50 to $3.00 per piece. Ocean freight is dramatically cheaper for large orders but takes 20–35 days. Air freight is fast (3–5 days) but can triple your logistics cost.

3. Import Duties and Taxes

Bangladesh enjoys preferential trade access in many markets. EU buyers benefit from EBA (Everything But Arms) — meaning zero duty on garments from Bangladesh. US buyers face MFN tariffs which can vary from 5–32% depending on the product category.

4. Quality Control and Inspection

Third-party pre-shipment inspection (PSI) typically costs $200–$450 per man-day. For most orders, one inspection day is sufficient. Apparel Emporium includes in-house quality control as part of our sourcing service at no additional charge.

5. Letter of Credit (LC) or Payment Processing Fees

LC fees, bank charges, and currency conversion costs typically add 1–2% to your total order value.

The Real Savings of Using a Buying House

By working with Apparel Emporium, buyers benefit from consolidated oversight of all these cost components — often saving 8–15% on total landed cost compared to direct sourcing without an experienced Bangladesh-based partner.