Unit price is not programme cost
A quotation that is USD 2 lower can lose that advantage after one extra sample round, a packaging redesign, unplanned certification work or a high field-return rate. The correct comparison unit is the programme delivered to the agreed market—not the appliance at the factory gate.
Build a normalised cost sheet with five groups. First, add non-recurring costs: tooling, fixtures, artwork, samples, testing and certification. Second, add recurring product costs: oven, accessories, cord set, labels, manuals and packaging. Third, add logistics: inland transport, export handling, freight, insurance, duty and destination charges. Incoterms help define delivery responsibilities, but buyers still need a complete landed-cost model for their own route.
Price the cost of uncertainty
Some costs are probabilities rather than fixed invoices. Include expected inspection rework, launch delay, replacement shipments, spare parts and warranty service. Do not invent a large contingency percentage. Record each risk, its likely cost and the evidence behind the estimate.
Compare cash timing as well as totals
A lower tooling price paid entirely before sample approval may be less attractive than staged payments tied to documented gates. MOQ, deposit percentage, payment balance, production lead time and transit time all affect working capital.
Use scenarios
Calculate at least three volumes: pilot order, expected year one and downside case. Spread one-off costs only over units you reasonably expect to sell. A supplier should not be selected because a five-year forecast makes the first small order look artificially cheap.
The result is not a perfect prediction. It is a transparent decision model that shows which assumptions could change the supplier ranking.
Official reference
- [ICC Incoterms rules](https://library.iccwbo.org/clp/clp-incoterms.htm)