Guide · quotation anatomy

How to Read a Chinese Factory Quote: MOQ, EXW, FOB, Samples, Tooling

Most quotations arrive as six lines in an email: product, quantity, unit price, lead time, payment terms, signature. Four of those six change the price by more than the price itself. This is what each line fixes, what it leaves open, and the questions that close the gap before you compare two quotes.

The terms in one view

Term	Fixes	Open if unstated
MOQ	Minimum order quantity at that price	Whether price steps exist above it
EXW	Price at the factory gate	Who pays China inland freight and export clearance
FOB	Price loaded on board at a named port	Which port; who pays origin charges
CIF / CFR	Price including freight (and insurance) to a destination port	Risk transfer point, destination charges
Sample fee	Cost of a pre-production unit	Refundable or not; who pays sample freight
Tooling	One-time mould and fixture cost	Ownership; amortisation; maintenance
Lead time	Days from a defined start point	What the start point is
Deposit	Share paid before production	What releases the balance
Price validity	How long the number holds	What allows a re-quote

MOQ: the number that sets the price

Minimum order quantity is not a formality on the way to the unit price; in most quotations it is what the unit price is calculated from. Across 92 public factory listings in our 2026-10-30 sample, 14 quote from a single piece, 45 quote at 10 pieces or fewer, five ask for more than 500, and the highest asks for 1,000. The median is 18 pieces. That spread is why two quotations for the “same” product can differ by half: one was costed at 10 units and one at 1,000.

Read the MOQ as a range, not a threshold. Ask for the price at three quantities, one below your target, one at it, one above. If the three are identical, the price was not derived from a costing sheet; if they step, you can see how much of the gap between two suppliers is volume rather than margin. Our own sample shows the effect running in both directions by class: on pet feeders the high-volume listings are 47% cheaper, on litter boxes the high-volume listings are 28% dearer because they are larger machines.

EXW and FOB: where the price stops

EXW (ex works) means the quoted price ends at the factory door. Everything after it is yours: inland trucking to the port, export declaration, terminal handling, and the risk of the goods while they sit in a container yard. It is the cheapest incoterm on paper and the most expensive one to learn on.

FOB (free on board) means the seller delivers the goods on board the vessel at a named port and clears export. The port name is not optional: FOB Ningbo and FOB Shenzhen are different numbers, and a line that says only “FOB” is incomplete. Risk passes when the goods are on board, not when they arrive. The step from EXW to FOB is normally domestic trucking plus export clearance plus loading, and it is exactly the step that a supplier can quietly leave out when quoting against a competitor who quoted FOB.

CIF and CFR add main-carriage freight to the destination port, with insurance included in CIF. The common misreading is that CIF moves risk to the destination. It does not. Under CIF the seller pays freight; risk still passes at origin, which is why a CIF price that looks cheaper than an FOB plus your own forwarder can leave you holding a claim with no contract behind it. The terms themselves are published by the ICC as Incoterms 2020, and the rule version should be named in the quotation.

Sample fee: what you are actually buying

A sample fee is normally the unit cost plus a handling charge, and sometimes it is refunded against the first order. Three points belong in writing with the fee: whether it is credited back, who pays the freight to you, and whether the sample is built to the production specification or to a “presentation” standard. A sample that is not built to the production line tells you nothing about the product you will receive, and the fee for it is a cost of finding that out late.

Tooling: one-time, and owned by someone

Tooling is the mould, die, jig or fixture made for your part, and it is charged once. The commercial questions matter more than the number: who owns the tooling after it is paid for, whether it stays at that factory, what the maintenance arrangement is, and what happens to it if you move. A supplier that will not state ownership in the quotation is telling you that the tooling is an asset on their balance sheet, not yours, whatever the invoice says.

Ask also for the tooling cost separately from the unit price rather than amortised into it. Amortisation across an assumed quantity hides two things: the real one-time cost, and the unit price you will be charged once the assumed quantity is reached.

Lead time: from when?

“30 days” is not a lead time until the start point is named. The useful form is: production lead time counted from receipt of deposit and approval of the pre-production sample, excluding Chinese New Year and excluding transit. Ask for it in that form. A quotation that says 30 days from order confirmation, when the sample is still unapproved, is a number that will move.

Deposit and payment terms

A deposit is normal; what matters is what releases the balance. The two clauses worth reading twice are the inspection trigger (balance against a passed inspection, or against a photograph of the cartons) and the tolerance clause (what happens if the delivered quantity or specification differs). Payment terms also carry a price: a supplier offering longer terms has priced the financing into the unit price, so terms and price should be read together rather than negotiated separately.

Proforma invoice: the version that counts

The proforma invoice is the document that fixes the deal: product description, specification, quantity, unit price, incoterm, named port, payment terms, lead time, and validity. Treat the emailed quotation as a draft and the proforma as the record. When a price changes, the change should appear as a new proforma rather than as an email sentence, because the sentence is not attached to anything you can point at six weeks later.

Price validity: the line most quotations leave out

Material prices move, and a quotation without a validity period is either valid forever, which no factory means, or valid until it is not, which is worse. Ask for a stated period and for the basis on which a re-quote is allowed — a named material index, or a currency movement, rather than “market conditions”. This is the cheapest clause to add and the most expensive one to discover missing after you have quoted your own customer.

What a complete quotation contains

1. Product description with material grades and key components named, not just a model number.
2. Unit price at a stated quantity, with the price steps for other quantities.
3. Incoterm, rule version, and named port.
4. MOQ and the lead time with its start point.
5. Sample fee, mould cost, and ownership of the mould.
6. Payment terms, deposit share, and what releases the balance.
7. Price validity period and the basis for a re-quote.
8. Packaging: carton dimensions, units per carton, gross weight. This is the line that sets your freight, and it is missing from most quotes.

A quotation missing three or more of these is not a price you can compare; it is an opening position. The comparison itself is arithmetic, and it is set out step by step in is your supplier overcharging you. For the underlying price levels by product class, see what manufacturing in China costs.

One boundary, stated once: we audit price, not quality. Inspection, compliance, certification and freight booking are outside this analysis and are mentioned here only because they sit next to the terms above in a real negotiation.

Related: factory price versus landed cost · is your supplier overcharging you · what manufacturing in China costs · what a pet water fountain costs to make · all guides