The price on a Chinese supplier’s quote is not your cost. It is the starting point. By the time your goods clear customs and reach your warehouse in Auckland, Sydney, or anywhere else in New Zealand or Australia, you will have paid international freight, insurance, import duty, GST, port charges, customs broker fees, and domestic delivery on top of that factory figure. For many buyers, especially those placing their first order, the gap between the quoted unit price and the true landed cost comes as a genuine shock — and it arrives at the worst possible moment, when the goods are already on the water.
This article walks through every component that stacks on top of the supplier quote, explains how import duty and GST work in principle for both markets, and gives you a practical method for estimating your landed cost before you commit to an order. The goal is to make sure you are comparing suppliers and building margins on the number that actually matters: the cost per unit on your shelf, not the price in a PDF from Guangzhou.
The Full Stack: What Makes Up Your Landed Cost
Landed cost is the total of everything you pay to get goods from a factory floor in China to a usable location in New Zealand or Australia. Breaking it into layers makes it easier to estimate and harder to miss.
The goods themselves come first — the ex-works or FOB factory price, multiplied by quantity. Then comes international freight, which is either sea freight (FCL or LCL) or air freight depending on your timeline and volume. Sea freight is almost always cheaper per cubic metre, but the difference narrows on small, heavy, or time-sensitive shipments. Insurance sits alongside freight and is often underestimated or skipped entirely by first-time importers; skipping it is a risk that rarely feels significant until it is.
Import duty is applied on arrival, calculated against the customs value of the goods. GST in both markets is then calculated on a base that includes more than just the goods value — it typically incorporates freight and insurance as well, which surprises buyers who assume GST is simply a percentage of the invoice. Port and terminal handling charges apply at the destination port and vary by port, carrier, and time of year. Customs broker fees cover the work of lodging the import entry and are paid separately from any government charges. Finally, domestic freight — the truck or courier from the port or bonded warehouse to your premises — closes the stack.
The same factory quote can produce meaningfully different landed costs depending on which Incoterm governs the shipment. A supplier quoting EXW places all logistics costs on you from the factory gate. An FOB quote means the supplier has loaded the goods onto the vessel; from there, freight, insurance, and all destination costs are yours. A DDP quote means the supplier has nominally covered everything to your door, but that does not mean those costs have disappeared — they are embedded in the price, sometimes with a margin on top. Understanding Incoterms before you compare quotes is not optional; it is the foundation of any useful cost comparison.
How Import Duty Works for NZ and AU Buyers
Import duty in both New Zealand and Australia is determined by two things: the tariff classification of the goods and their country of origin. Tariff classification is based on the Harmonised System (HS code), an internationally standardised framework that assigns a numeric code to every type of product. The rate of duty that applies to your goods depends on which HS code they fall under.
Country of origin matters because trade agreements can reduce or eliminate duty that would otherwise apply. Both New Zealand and Australia have trade agreements with China that can lower duty rates on qualifying goods, but the paperwork must support the claim. This means your supplier needs to provide documentation — typically a certificate of origin — that demonstrates the goods meet the origin rules under the relevant agreement. A supplier who cannot or will not provide that documentation leaves you paying the general rate by default.
What this means practically is that two buyers importing the same product can pay different amounts of duty depending on whether they have the right paperwork. It also means that a product you assumed was low-duty might carry a higher rate than expected once it is correctly classified on arrival.
This article does not quote specific duty rates because they change, differ by product, and differ between the two markets. The right approach is to identify the HS code for your product, confirm the applicable rate with a licensed customs broker or through the official tariff schedules published by the New Zealand Customs Service and the Australian Border Force, and build that rate into your estimate before ordering — not after.
GST at the Border: More Than You Might Expect
Both New Zealand and Australia collect GST on imported goods, and in both cases the calculation base is broader than just the purchase price of the goods. GST is generally applied to the customs value of the goods plus freight and insurance costs, meaning the amount of GST you pay at the border is larger than a simple percentage of the invoice.
For businesses registered for GST in their home market, this is usually a timing issue rather than a permanent cost — the GST paid on import can typically be claimed back as an input tax credit in the relevant return period. But that timing gap matters. You are paying GST at the border before you have sold any of the goods, and depending on your cash flow position and return cycle, that outlay sits with you for weeks. On a large shipment, it is a meaningful sum.
For businesses that are not GST-registered, or that are importing goods that are exempt from input tax credits in their specific circumstances, the GST at the border is a real cost that needs to be factored into the landed unit price.
The practical point is this: never estimate your landed cost using the goods value alone as the GST base. Use a figure that includes freight and insurance, and confirm the current approach with your accountant or customs broker for your specific situation.
The Fees Buyers Forget
Beyond freight, duty, and GST, there is a layer of smaller charges that rarely appear on anyone’s first landed-cost estimate but show up reliably on the invoice from the freight forwarder.
Port and terminal handling charges (THC) are levied by the terminal operator at the destination port. They are separate from the ocean freight charge, and they vary. Biosecurity and inspection fees apply when goods are subject to border inspection — this is common for food-contact products, timber, certain textiles, and anything that triggers a biosecurity concern at the NZ or AU border. The cost of a physical examination can be significant and the timing unpredictable.
Customs broker fees cover the lodgement of the import entry and any associated compliance work. These are typically a flat fee per shipment rather than a percentage, which means they hit harder on small orders. A broker fee that is unremarkable on a 500-unit shipment becomes a noticeable cost per unit on a 50-unit trial order.
Currency conversion is another cost that is frequently overlooked. If you are paying your Chinese supplier in USD, the exchange rate and the margin applied by your bank or payment provider are part of your real cost. On a USD 20,000 order, a 1.5% conversion margin is USD 300 — enough to meaningfully shift the per-unit cost on a smaller order.
None of these fees are enormous individually. Together, on a small shipment, they can add a significant percentage to the landed cost that was never visible in the supplier quote.
Estimating Landed Cost Before You Order
The method is straightforward. Build a per-unit estimate from three inputs: the supplier quote, a freight quote for the relevant mode and volume, and a conservative allowance for duty, GST, and fixed fees.
Start with the total shipment cost: goods value at the agreed Incoterm, plus international freight for the actual carton dimensions and weight (not the theoretical CBM — volumetric weight affects air freight and LCL sea freight pricing in ways that catch buyers out). Add insurance. Apply a duty rate based on the HS code confirmed with a broker or the official tariff. Calculate GST on the combined customs value. Add an allowance for port charges, broker fees, and inspection risk. Add domestic delivery to your warehouse. Divide by the number of units. That is your estimated landed cost per unit.
Do this for every supplier you are seriously considering, using the same freight assumptions so the comparison is honest. The supplier with the lowest factory unit price is not always the lowest landed cost — differences in packing efficiency, carton dimensions, and declared product categories all affect the final number.
The comparison rule that matters: always compare suppliers on estimated landed cost per unit, not on the factory price. A supplier quoting 10% less per unit but packing half as efficiently per carton can easily cost more by the time the goods arrive. This is one of the reasons accurate packing specifications from the supplier matter before you commit — a topic covered in detail in Packing Checks Before Freight from China.
For buyers who want to get their China-side numbers right before building this estimate, contact ANZSBS to discuss how we can help verify supplier information from Guangzhou.
Common Landed-Cost Mistakes
Comparing quotes on different Incoterms is the most common error. An EXW price and an FOB price for the same goods are not comparable without adding freight, inland haulage, and export clearance to the EXW figure. Buyers who skip this step often select the wrong supplier based on a number that does not mean the same thing.
Ignoring volumetric freight reality is the second. Freight on bulky, lightweight goods is priced on volume, not weight. A supplier who quotes a compact carton but ships in oversized packaging will cost you more in freight than the estimate assumed. Always request actual carton dimensions and gross weights before finalising a landed-cost estimate.
Forgetting that fixed fees punish small orders is the third. Broker fees, port charges, and inspection costs do not scale with order size. A fixed cost of a few hundred dollars is negligible on a full container but represents a significant per-unit cost on a small LCL shipment or air freight trial order. Factor this into your minimum viable order size calculation.
Assuming a DDP price is transparent is the fourth. Delivered Duty Paid means the supplier has nominally handled all costs to your door. In practice, DDP prices from Chinese suppliers sometimes include a substantial margin on top of actual duty and freight costs, and may use freight channels that are slower or less reliable than you would choose yourself. DDP removes your visibility into the actual cost stack — which matters if you need to renegotiate, reorder, or switch suppliers.
How ANZSBS Helps Get the China-Side Numbers Right
Most landed-cost problems start before the goods are shipped. They start with an unclear spec that results in the wrong product being made, a packing arrangement that was never confirmed and turns out to be inefficient, or a supplier quote that omits details a customs broker will later need to classify the goods correctly.
ANZSBS operates from Guangzhou, which means we work directly with suppliers at the source — verifying that the product specification matches what was agreed, confirming actual carton dimensions and packing details, and making sure the documentation a buyer needs to support a preferential duty claim is in order before the goods leave the factory.
For NZ and AU buyers who are comparing suppliers or preparing for a first order from China, getting the inputs right on the China side is what makes a reliable landed-cost estimate possible. Vague specs produce vague quotes. Unconfirmed packing details produce freight surprises. A supplier whose documentation is inconsistent creates duty complications at the border.
Our product sourcing support and supplier verification services are designed to give buyers the accurate, verified China-side information their landed-cost estimates depend on. We also work alongside buyers who have found suppliers through the Canton Fair or other channels and need the factory-level details confirmed before they commit. Pricing and turnaround are confirmed at engagement.
If you are preparing an order from China and want accurate inputs for your cost estimate, get in touch with ANZSBS.
Is import duty the same for all products from China?
No. Import duty rates vary by product based on the tariff classification (HS code) assigned to the goods, and they also vary depending on whether a preferential rate applies under a trade agreement between your country and China. Two different products can attract very different duty rates, and even the same product type can be classified differently depending on its specific characteristics. Always confirm the HS code and applicable rate with a licensed customs broker or the official tariff schedule before ordering.
Does GST on imports get refunded?
For businesses registered for GST in New Zealand or Australia, GST paid at the border is generally claimable as an input tax credit in the relevant return period. It is not waived at the border — you pay it on importation and reclaim it later. The timing gap between payment and refund affects cash flow, particularly on large shipments. Confirm the treatment with your accountant based on your specific registration and product circumstances.
What is the difference between EXW and FOB pricing from Chinese suppliers?
EXW (Ex Works) means the supplier’s price covers only the goods at the factory gate. You are responsible for all costs from that point: inland freight to the port, export clearance, international freight, insurance, and all destination costs. FOB (Free On Board) means the supplier has delivered the goods onto the vessel at the origin port; from there, all costs are yours. An EXW quote is not directly comparable to an FOB quote without adding the inland and export costs to the EXW figure first.
Why does packing matter for landed cost?
Packing affects freight cost directly. International sea freight on LCL shipments and all air freight is priced on either actual weight or volumetric weight, whichever is greater. If a supplier uses oversized or poorly packed cartons, you pay for the volume they occupy, not just the weight of the goods. Confirming actual carton dimensions and gross weights before finalising an order is essential for building an accurate freight estimate.
What is a customs broker and do I need one?
A customs broker is a licensed professional who lodges import entries with the relevant customs authority on your behalf and ensures the documentation meets compliance requirements. For commercial imports from China into New Zealand or Australia, using a licensed broker is strongly advisable. They can confirm the correct HS classification for your goods, advise on applicable duty rates and preferential origin claims, and handle any queries from customs during clearance. Their fees are a fixed cost per shipment and are part of your landed-cost estimate.
How do trade agreements between NZ/AU and China affect duty rates?
Both New Zealand and Australia have free trade agreements with China that can reduce or eliminate import duty on qualifying goods. Whether your goods qualify depends on the rules of origin set out in the relevant agreement, and the supplier must provide appropriate documentation — typically a certificate of origin — to support the claim. Without that documentation, the standard (non-preferential) rate applies by default. Confirming that your supplier can provide the necessary paperwork before you order is part of getting the China-side documentation right.