HOW TO COMPARE SUPPLIER QUOTES BY LANDED COST

Key Takeaways:

1. The quote sheet shows a price, not a cost. Landed cost adds delivery, insurance, the cash you tie up while you wait, and the risk you carry, so the cheapest quote and the best-value quote are often from different suppliers.
2. Cash and risk are real costs in Nigeria right now. Even after the CBN cut its policy rate to 23%, average maximum lending rates were still around 29% in August, so money sent out weeks before stock arrives has a price you should count.
3. Authorised sourcing is a commercial risk decision. Manufacturer-backed warranty, serial lists and proof of authorised sourcing protect your customers and your cash, and they can decide whether you get to bid for government and institutional work.
4. Consistency makes a decision defensible. Send every supplier the same request, ask for the same details in writing, use the same assumptions, and keep your quote sheets. Over time, they show you what a fair landed price looks like.

Landed cost is the total cost of getting stock onto your shelf, ready to sell. It goes beyond the price you pay your supplier. It includes shipping, insurance, customs duties, handling charges, and other expenses incurred along the way. It also accounts for the cash tied up while your goods are in transit and the risks you carry if there are delays, damages, or unexpected charges.

Understanding your landed cost gives you a more accurate picture of what each unit actually costs your business. Without it, you could price your products based on the supplier’s invoice alone, underestimate your expenses, and end up with slimmer margins than expected.

WHAT LANDED COST MEANS, AND WHAT RESELLERS SHOULD ADD

Landed cost as the total cost of getting a product from the factory to a customer’s door, including shipping, insurance, and any customs and duties when goods cross a border. If you buy from a local distributor, you are not paying import duties yourself, but the principle holds. The unit price is where the cost starts, not where it ends.

For stock bought in Nigeria, two more lines often decide whether a deal is really cheap: the cost of the cash you tie up, and an allowance for the risk you are carrying. Both are your own estimates, so treat them as estimates and use the same method on every quote.

Cash is worth including because it is not cheap right now. The CBN cut its policy rate from 26.5% to 23% at its meeting on 22 September 2026. But banks had not yet passed that cut through to borrowers, and the average maximum lending rate was about 29% in August. Money you send out three weeks before the goods arrive is money you cannot use to fund other orders, and it has a real price.

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Why Warranty, authorised sourcing and paperwork belong in the decision

It helps to separate two things that often get lumped together. Unauthorised goods are genuine products bought in one country and resold in another without the trademark owner’s consent, whereas counterfeits are fakes. An unauthorised market laptop may be real and still arrive in Nigeria with no manufacturer behind it. Samsung’s published warranty terms for the South African market, for example, apply to genuine products supplied through its official distribution and retail channels, and a claim needs proof of purchase. Terms differ by brand and by country, so check the warranty conditions of every brand you sell in Nigeria.

This is also why authorised distribution is a commercial risk argument and not a compliance footnote. TD Africa operates and helps establish a four-tier market structure of manufacturer, distributor, reseller, and end user through the superApp. The practical value of that structure is that someone accountable stands behind the product at every step, which is what you need when a customer comes back with a faulty unit.

If you sell to government or institutions, paperwork can decide whether you get to bid at all. Nigeria’s federal Standard Bidding Document for goods lists a Manufacturer’s Authorization Letter among its standard forms. Lagos State’s version lists the same letter among the forms the bidder submits. Whether a particular tender requires it is set in that tender’s own documents, so read each one. A supplier who cannot provide serial lists, invoices, and proof of authorised sourcing cannot help you here.

A Comparison Process that works

A good process does not need to be complicated. It needs to be consistent, so every quote is judged the same way and every decision can be explained later.

1. Standardise the request: Send every supplier the same model, specification, quantity, delivery address, and required delivery date.
2. Ask for the same details in writing: Request stock confirmation, lead time, warranty terms, delivery terms, documents, payment terms, VAT treatment and price validity.
3. Calculate landed cost: Convert every quote into a total and a per-unit figure, using the same assumptions for each.
4. Score the non-price factors:  Rate availability, lead time, warranty, delivery and documentation against your own priorities.
5. Check the supplier: Confirm track record, authorised status and references.
6. Decide and document: Record the scores, assumptions and reasons, so the decision can be defended and learned from.

USING WHAT YOU LEARN TO BUY BETTER NEXT TIME

A comparison is more than a one-time decision. Kept in one place, your quote sheets become a quiet advantage. Over a few cycles, you will see what a fair landed price looks like for the models you buy most, which makes an unusually low quote easier to question and an unusually high one easier to challenge. You will also see which suppliers are strong on price, which on service, and which on reliability, so you can match each to the orders where they fit best.

COMMON MISTAKES TO AVOID

• Choosing on unit price alone: The lowest number wins before anyone reads the terms. Compare total landed cost, then score the rest.
• Comparing unlike quotes: Different variants, quantities, or VAT bases on the same page make one quote look cheaper than it is. Send every supplier the same request and ask each to state whether VAT is included.
• Trusting availability: Stock is promised without a quantity or a reservation. Ask for confirmed units and how long they will be held for you.
• Ignoring who backs the warranty: Seller-only cover on branded devices leaves the risk with you. Prefer a manufacturer-backed warranty through an authorised channel, and keep the serial list and invoice.
• Forgetting price validity: A good price can expire before approval or move with the exchange rate. Confirm the validity period and what happens after it.

FAQ

• What is landed cost?
  It is the total cost of getting stock to your shelf, ready to sell: unit price plus delivery, insurance, any duties or fees, and, in this method, the cost of cash tied up and a risk allowance.

• Should I always buy from the supplier with the lowest landed cost?
  Not automatically. Landed cost is one score among several. Availability, lead time, warranty and documents also matter, and a supplier who fails a must-have requirement should be set aside, whatever the price.
• What should I ask every supplier to put in writing?
  Ask for stock confirmation, lead time, warranty terms, delivery terms, documents, payment terms, VAT treatment, and price validity. Sending every supplier the same request makes the quotes comparable and the decision easier to defend later.