I sit on the side that writes the quote. When a buyer in Lagos, Accra or Nairobi messages a factory in Guangzhou or Shenzhen, the reply that comes back is a few short lines that look simple and hide most of the cost: a unit price, an Incoterm, a minimum order quantity, a carton spec and a payment term. Read those lines wrong and you wire money against a number that is not your number. The single most common mistake I see is treating the FOB price as the landed price. It is not even close. The terms on a Chinese quote each move real money - FOB, CIF, EXW, CBM, MOQ - and most of them are working in the supplier's favour by default, not because anyone is cheating, but because the quote is written in our shorthand for our convenience. This guide reads a quote the way I write one, term by term, with a fully worked carton calculation so you can turn a one-line message into a landed cost before you pay a deposit.
What does FOB mean on a Chinese quote?
FOB stands for Free On Board. It is the price of the goods loaded onto the ship at the Chinese port of departure - Shenzhen, Ningbo, Shanghai or wherever the factory ships from. The supplier covers everything up to that rail: the goods, the inland trucking to the port, export clearance and loading. From the moment the box is on the vessel, the cost and the risk are yours.
FOB explicitly EXCLUDES ocean freight, marine insurance and every destination cost - the sea leg, your customs duty and VAT, port handling at Apapa or Tema, and final delivery. That is exactly why I quote FOB by default and why I tell buyers to compare suppliers on it. FOB is the cleanest number to compare across factories, because it strips out the freight and insurance variables that have nothing to do with how good or cheap the factory is. Two suppliers quoting FOB Shenzhen are quoting the same scope; two suppliers quoting different Incoterms are not comparable until you convert them.
How is CIF different from FOB?
CIF stands for Cost, Insurance and Freight. It is FOB plus the ocean freight to your destination port plus marine insurance. So a CIF price is always higher than the FOB price for the same goods - the supplier (or their forwarder) has bundled the sea leg and a basic insurance policy into one figure that lands the container at your port, but not through customs and not to your door.
CIF matters for one big reason beyond convenience: customs valuation. Most African customs authorities assess import duty on the CIF value - the goods plus freight plus insurance - not on the bare goods price. Nigeria, Ghana and Kenya all work this way. South Africa is the notable exception: SARS values duty on a transaction (FOB-style) basis, freight excluded. So if you import into Lagos, the freight you pay is itself taxed; if you import into Durban, it broadly is not. Knowing which base your customs uses tells you whether a low FOB and high freight is cheaper at the border than a bundled CIF.
A CIF quote can be convenient for a first order because the supplier handles the forwarder. The cost is transparency: you cannot see the freight margin baked in, and a supplier who is weak at sourcing freight will quietly pass that on. Once you have a forwarder you trust, buying FOB and arranging your own freight is usually cheaper and always clearer.
What is EXW and why is it a trap?
EXW stands for Ex Works. It is the price of the goods sitting at the factory door - nothing else. The supplier does not even truck it to the port or handle export clearance. EXW looks like the cheapest number on any quote, because it is the smallest scope, and that is precisely the trap.
On EXW you arrange everything from the factory gate: domestic trucking inside China, Chinese export customs, port loading, the sea freight, the insurance and all destination costs. For a new importer with no agent and no relationship with a Chinese forwarder, that is a wall of logistics in a language you do not speak. The EXW unit price flatters the quote and then buries you in arrangement. I rarely recommend EXW to a first-time buyer; it suits an experienced importer with a consolidating agent in China who can absorb the export side cheaply.
| EXW (Ex Works) | FOB (Free On Board) | CIF (Cost, Insurance, Freight) | |
|---|---|---|---|
| Goods price | Yes | Yes | Yes |
| Inland trucking in China | No (you) | Yes | Yes |
| Chinese export clearance | No (you) | Yes | Yes |
| Loading on vessel | No (you) | Yes | Yes |
| Ocean freight | No (you) | No (you) | Yes |
| Marine insurance | No (you) | No (you) | Yes |
| Destination duty / VAT / delivery | No (you) | No (you) | No (you) |
| Who arranges the sea freight | Buyer | Buyer | Supplier / their forwarder |
| What customs usually values (most of Africa) | Add freight to get to CIF | Add freight to get to CIF | This figure (SA excepted) |
| Best for | Experienced importer with a China agent | Comparing suppliers; most buyers | First order, hands-off freight |
What is CBM and why does it set your freight?
CBM is cubic metres - the volume of your shipment. You get it by multiplying length by width by height, all in metres: a carton of 40cm x 30cm x 25cm is 0.40 x 0.30 x 0.25 = 0.03 CBM. Sea freight (LCL, less than container load) is priced per CBM, so the CBM of your order, not its weight, often decides the bill.
Air freight works differently: it charges on the greater of actual weight and volumetric weight. Volumetric kilograms are roughly CBM x 167 (the standard air divisor). So one CBM of feathers is billed as about 167 kg by air even if it weighs 30 kg on a scale. The practical rule: bulky-light goods - phone cases, plastic toys, foam, packaging - price on volume, and that is what makes a cheap unit feel expensive once it ships.
A worked example: from FOB price to a freight estimate
Take a real-shaped quote line: FOB Shenzhen $4.20/unit, MOQ 1,000, carton of 100 units measuring 40 x 30 x 25 cm. Here is how I would read every number on it.
Goods first. The MOQ is 1,000 units, so the smallest order is 1,000 x $4.20 = $4,200 FOB. That $4,200 buys the goods on the vessel at Shenzhen - no sea freight, no insurance, no duty, nothing past the rail.
Now the volume. Each carton is 0.40 x 0.30 x 0.25 = 0.03 CBM and holds 100 units. 1,000 units is 10 cartons, so 10 x 0.03 = 0.30 CBM total. By sea LCL at an indicative $400/CBM, that volume is only about $120 of freight - but LCL almost always has a minimum charge of around 1 CBM, so you would likely pay the 1 CBM minimum (~$400) for a part-load this small. That alone is nearly 10% on top of the goods.
By air the same 0.30 CBM is about 0.30 x 167 = 50 volumetric kg; at an indicative $8.50/kg that is roughly $425 - similar to the sea minimum here, which is why very small orders sometimes fly. Then comes the part the FOB price never showed: destination duty and VAT assessed on CIF (goods + freight + insurance), port charges and delivery. On a 20%-duty item landing in Nigeria, the effective border burden is roughly 30% of CIF. So a $4,200 FOB order is realistically a $5,000-plus landed order before you have sold a single unit. FOB is the start of the cost, not the end of it.
| Line on the quote | What it means | The number |
|---|---|---|
| FOB Shenzhen $4.20/unit | Goods on the vessel, freight and duty excluded | $4.20 per unit |
| MOQ 1,000 | Smallest order the factory will run | 1,000 units = $4,200 FOB |
| Carton 40x30x25cm / 100 units | Volume per carton | 0.03 CBM, holds 100 |
| 10 cartons (1,000 units) | Total shipment volume | 0.30 CBM |
| Sea LCL @ ~$400/CBM | Charged on volume, ~1 CBM minimum | ~$400 (minimum), not ~$120 |
| Landed in Lagos | + duty/VAT on CIF, port, delivery | ~$5,000+ all-in |
What does MOQ mean and is it negotiable?
MOQ is the minimum order quantity - the smallest run the factory will produce for you. It is set by production economics, not by stubbornness: setting up a machine, a mould, a print screen or a fabric dye lot has a fixed cost, and the MOQ is the volume that spreads that cost to a price the factory can quote. A 1,000-unit MOQ usually means the setup is real.
MOQ is often negotiable, and I negotiate it constantly. Three levers work. First, accept a higher unit price for a smaller run - you pay for the inefficiency, but you get to test the market. Second, mix designs or colours within one production run so the factory still hits its batch size while you get variety. Third, and most powerful for a small buyer, order through an agent who consolidates: the agent aggregates several buyers or several SKUs into one order that clears the factory MOQ, and you take a slice. If a supplier will not move at all on MOQ, it usually means the tooling cost is genuinely high - not that they dislike you.
What is Trade Assurance?
Trade Assurance is Alibaba.com's escrow-style buyer protection. You pay through the platform, the order has agreed terms (quantity, quality, ship date), and if the supplier breaches them you have a documented channel to claim a refund. It is the single biggest reason a first-time buyer should run an export order through Alibaba.com rather than off-platform: the protection only exists if the money moves through it.
Be careful not to confuse this with 1688. 1688 is the domestic Chinese marketplace, and its buyer protections are built for a Chinese buyer with a Chinese ID, a Chinese bank account and recourse to Chinese consumer law. As a foreign buyer paying through an agent, you generally do not get 1688's domestic protection in any form you can enforce - your protection there is the agent's reputation and contract, not the platform's. That trade-off (cheaper prices on 1688, real platform escrow on Alibaba.com) is one a buyer should make with eyes open.
What else on the quote costs you money?
Past the headline Incoterm, the lines that quietly move your real cost are these. Unit price versus total: confirm whether the figure is per piece or per carton, and always restate the full order total back to the supplier in writing. Lead time: production days plus the sea transit (often 30-40 days to West Africa) is your real cash-to-stock gap; a low price with a 60-day lead can be worse than a higher price in stock sooner.
Sample cost: expect to pay for samples and shipping, and expect it to be refunded or credited against a bulk order if you proceed - agree that up front. Packaging and carton spec: the carton dimensions are not trivia, they are your CBM and therefore your freight; ask for them on every quote. Payment terms: the standard is 30/70 TT - 30% deposit to start production, 70% balance against a copy of the bill of lading before the goods sail. Do not pay 100% up front to a new supplier. Finally, the HS code on the proforma invoice: it determines your destination duty rate, so check the supplier's code against your own customs tariff before you ship - a wrong code is your problem at the border, not theirs.
What this guide does not settle
Incoterms are a legal framework published by the International Chamber of Commerce, and the rules carry nuance this primer compresses - the exact point where risk transfers, who pays terminal handling, and how named ports are specified all have precise definitions in the official text. When real money or a dispute is at stake, the ICC Incoterms 2020 rules are the authority, not this page.
Suppliers misuse these terms. I have seen 'FOB' used loosely to mean 'a price near the port', and 'CIF' quoted without a real insurance policy behind it. Never assume the term means what it should - confirm the scope in writing: which port, what is and is not included, who arranges and pays the sea leg, and what insurance cover (if any) exists. A one-line WeChat quote is a starting point, not a contract.
Every figure here - $4.20, $400/CBM, $8.50/kg, the 167 air divisor, the ~30% Nigerian border burden - is indicative, for teaching the method. Your real freight rate, duty rate and HS classification depend on your goods, your route and the day. This is a primer to help you read a quote, not legal, customs or tax advice.
The verdict: standardise on FOB and price the rest yourself
Standardise on FOB. Ask every supplier for an FOB price at their named port, because it is the cleanest like-for-like comparison and it forces the freight and duty - the costs that actually decide your margin - out into the open where you can price them. Treat CIF as a convenience for a first hands-off order and EXW as a tool for experienced buyers with an agent in China.
Then do the arithmetic the quote hides: convert the carton spec to CBM, estimate freight on volume, add duty and VAT on the CIF value, and only then compare the landed cost to your selling price. The importers who survive are the ones who knew the landed number before they wired the deposit - not the ones who fell in love with a low FOB sticker.
Frequently asked questions
Is FOB or CIF cheaper?
For the same goods, FOB is always the lower number because it excludes the ocean freight and insurance that CIF bundles in. Whether FOB is cheaper overall depends on whether you can arrange freight more cheaply than the supplier - and, in most of Africa, on the fact that duty is charged on the CIF value, so the freight you add is itself taxed.
Does FOB include shipping to my country?
No. FOB covers the goods only up to being loaded on the vessel at the Chinese port. Ocean freight, insurance, destination duty, port handling and delivery are all on you. Treating an FOB price as your landed cost is the most common and most expensive mistake new importers make.
How do I calculate CBM from a carton size?
Multiply length by width by height in metres. A 40 x 30 x 25 cm carton is 0.40 x 0.30 x 0.25 = 0.03 CBM. Multiply by the number of cartons for the shipment total. Sea LCL is priced per CBM (usually with a ~1 CBM minimum), so this number sets your freight.
Is MOQ always fixed?
Often not. MOQ reflects production setup cost, so you can frequently lower it by accepting a higher unit price, mixing designs within one run, or ordering through an agent who consolidates several buyers into one order that clears the factory minimum. If a supplier will not budge at all, the tooling cost is probably genuinely high.
What does a 40x30x25cm carton of 100 units mean for freight?
Each carton is 0.03 CBM, so 1,000 units (10 cartons) is 0.30 CBM. By sea LCL you would likely pay the ~1 CBM minimum (around $400 at indicative rates), not the ~$120 the raw volume suggests. By air it is about 50 volumetric kg. Either way, freight plus duty turns a $4,200 FOB order into a $5,000-plus landed one.
Why is EXW not the cheapest option even though the price is lowest?
EXW is the smallest scope - goods at the factory door - so on top of it you must arrange inland trucking in China, export clearance, loading, freight, insurance and all destination costs yourself. For a new importer without a China agent, the arrangement cost and risk usually outweigh the lower sticker. EXW suits experienced buyers with a consolidating agent.
Do I get Trade Assurance protection on 1688?
Not in an enforceable form as a foreign buyer. Trade Assurance is Alibaba.com's escrow protection and applies when you pay through that platform. 1688's protections are built for a Chinese buyer with local ID, bank account and legal recourse; buying through an agent, your real protection on 1688 is the agent's contract and reputation, not the platform.
What payment terms are normal for a Chinese supplier?
The standard is 30/70 TT: a 30% deposit to start production and the 70% balance against a copy of the bill of lading before the goods sail. Avoid paying 100% up front to a new supplier, and where possible use Alibaba.com Trade Assurance so the money moves through escrow.
Which Incoterm should I ask suppliers to quote?
Ask for FOB at their named port. It is the cleanest figure for comparing factories because it strips out freight and insurance, and it makes you price the destination costs that actually decide your margin. Use CIF only when you want a hands-off first order, and avoid EXW unless you have an agent in China.
Last updated: 7 June 2026. Reference page; reviewed twice yearly.
Wei writes the half of the corridor most African import guides miss: the China side. How 1688 and Alibaba sellers actually set MOQs and quote FOB vs CIF, what a supplier means by 'trade assurance,' why Alipay/WeChat work for domestic buyers but not foreign cards, and which B2B rails settle cleanly into a Chinese supplier's account. Based in Guangzhou, close to the markets and the freight forwarders, he gives African importers the supplier's-eye view that makes for better deals.