Working Out What a Machined Part Really Costs You

By CNC Machining Vietnam·Published September 21, 2026·Editorial standards

The cheapest quote and the cheapest part are different things often enough that comparing unit prices is close to useless. Landed cost is the discipline of adding every line until you have one number per part, delivered to your door, which can be set beside any other source in any other country.

It is not complicated. It is just rarely done.

The lines that make up landed cost

Work in one currency, per shipment, and divide by the quantity at the end.

Line	Where it comes from
Ex works part price	The shop quote, stripped of anything else
Tooling or fixture charge	One off. Amortise across the expected lifetime quantity, not this order
Export packing	Often quoted separately. See the packing guide
Inland haulage to port or airport	Inside the price under FOB and above, yours under EXW
Export clearance	Usually inside FOB
Main freight	Air or sea, per shipment
Insurance	Optional and often skipped, which is a decision rather than a saving
Destination handling and terminal charges	The line everyone forgets. Ask your forwarder for an all in quote
Customs brokerage	Per entry
Import duty	Rate applied to customs value. Depends on classification and origin
Import taxes	VAT or equivalent, usually recoverable for a business, so track separately
Inland delivery to you	Per shipment
Scrap and rework allowance	A percentage based on the source’s actual record

Divide the total by the accepted quantity, not the shipped quantity. If two percent arrive unusable, you paid for them.

The three lines that distort comparisons most

Incoterm. An EXW price and a DAP price are not the same scope. Before comparing anything, normalise: either add the missing freight to the EXW quote or strip it out of the DAP one. The Incoterms guide sets out exactly what sits inside each term.

Duty and origin. Two identical parts from two countries can carry very different duty rates, and whether you get the lower one depends on having the right certificate of origin in hand before the goods ship. Never model a preferential rate you have not confirmed you can claim.

Shipment size. Freight and brokerage are largely per shipment, not per part. A 50 piece order carries the same customs entry cost as a 5000 piece order. Small orders always look expensive per part in a landed cost model, and that is the model telling you something true.

A worked structure

The numbers below are placeholders. Replace them with your own quotes. The point is the shape.

PER SHIPMENT
  Parts:              qty x ex works unit price
  Export packing:     quoted separately
  Freight:            forwarder quote, door to port or door to door
  Insurance:          percentage of landed value
  Destination charges: terminal, handling, deconsolidation
  Brokerage:          per entry
  Duty:               rate x customs value
  Inland delivery:    per shipment
  --------------------------------------------
  Total landed per shipment

  Divide by: quantity accepted, not quantity shipped
  = LANDED COST PER PART

AMORTISED SEPARATELY
  Tooling / fixture:  one off / expected lifetime quantity
  Onboarding time:    one off, tracked but usually outside the per part figure

Keep VAT or its local equivalent out of the comparison if you recover it, and note it separately so the cash flow impact is visible.

What it usually reveals

Small orders are expensive per part. Not because the shop is expensive, but because the fixed shipment costs land on few pieces. The answer is usually to order less often in larger batches, not to change supplier.

Air freight decisions look different. Once freight is per part rather than per shipment, the air premium on a dense, valuable component is often smaller than it felt. The air versus sea guide covers why density matters here.

The cheapest ex works quote frequently is not the cheapest landed. A shop that ships from a less convenient port, or that cannot supply the right certificate of origin, can lose a ten percent price advantage in duty and haulage alone.

Scrap rate matters more than people expect. A source that is three percent cheaper and produces two percent more rework is not cheaper.

Comparing two countries properly

Set up the same model twice and change only what genuinely differs:

• Ex works price
• Duty rate and whether a preferential rate is available
• Freight route, transit time and cost
• Lead time, and therefore the stock you have to carry
• Historic scrap and rework, if you have any

Hold everything else constant. If you do not have historic quality data for the new source, run the model without it and treat the first order as the experiment that fills that field in. That is the logic behind the second source playbook.

Do not model what you have not confirmed

Two figures are routinely assumed and routinely wrong:

• The duty rate. It depends on the classification your broker uses, not on the one your supplier wrote on the invoice. Confirm it with your broker before modelling.
• Destination charges. Terminal handling, deconsolidation and documentation fees at your end are real money and are missing from most freight quotes. Ask for an all in figure.

A landed cost model built on two assumed numbers is just a unit price with extra steps.

Build it once

Put the structure above in a spreadsheet with the shipment lines at the top and the per part division at the bottom. Every future comparison becomes a matter of dropping in one quote and one freight figure.

When you have quotes to run through it, send the drawing and up to three shops in Vietnam will quote the part on the shipping term you specify, so the comparison starts from the same scope.

The duty line is explained in import duty on machined parts from Vietnam.

See also: the landed cost calculator for machined parts from Vietnam, which runs these lines for any Incoterm in your browser.

Frequently asked questions

Keep reading

• What Is Actually Inside a CNC Machining Quote
• Ten Drawing Changes That Lower a Machining Quote