This is the most fundamental difference between a "Prototype 1" (low-price) factory and a "Prototype 3" (High-Capability Partner).
"Prototype 1" sells you an "FOB Price": a number that looks extremely low and tempting.
"Prototype 3" sells you a "Landed Cost": a transparent, predictable, and fully risk-managed final cost.
The B2B importer's biggest nightmare is being lured by a $3.00 FOB quote, only to discover (after all hidden fees) that their true landed cost is $8.00. This guide teaches you to see through the "FOB trap."
The core problem with "Prototype 1" factories is that their capability in "Quality Control" and "Shipping Safety" is not stable.
When you choose the lowest FOB price, you are, in effect, "gambling." You are betting that this specific shipment happens to be one of their "good" ones. This gamble is the biggest "hidden cost" of a Prototype 1 factory:
The Cost of "Unstable QC" (Risk of Batch Rejection):
"Prototype 1's" FOB price is low because they don't invest in a "Stable Burn Chamber" or "Data-Driven QC" (as detailed in our [QC Guide]). Their quality control is based on "visual checks" and "feelings."
This means your first sample might be fine, but your second mass-production order could have catastrophic issues (sooting, tunneling, wrong scent, ASTM safety failures).
The Hidden Cost: When you receive this "failed" shipment at your port, the entire cost of goods, shipping, and high tariffs (from our [Tariff Guide]) becomes the "landed cost" that "Prototype 1" hid from you.
The Cost of "Unstable Shipping" (Risk of Damaged Goods):
"Prototype 1's" FOB price is low because they don't invest in a "1-Meter Drop Test" or "Multi-Layer Protection" (as detailed in our [Logistics Guide]). They use the thinnest cardboard and minimal filler.
This means one shipment might arrive safely, but the next (facing rough handling) could have a 10-15% breakage rate.
The Hidden Cost: This 10-15% loss of product is a direct cost that you must absorb, adding it directly to your "landed cost."
"Fixed" Hidden Fees:
Third-Party QC Fees: Because you don't trust "Prototype 1's" stability, you must spend $500 - $1000 to hire SGS or QIMA yourself. This is a cost you save when working with a "Prototype 3."
Destination Surcharges: Brokerage Fees, Terminal Handling Charges (THC), port fees... "Prototype 1" will never mention these, but you will have to pay them.
Once you understand "True Landed Cost," your negotiation strategy must change.
The Wrong Negotiation (with "Prototype 1"):
"Extreme Price Squeezing": Your only leverage with "Prototype 1" is price. When you demand "10% cheaper," you are actively forcing them to make their already "unstable" QC and packaging even "cheaper" (i.e., worse).
This is a lose-lose "Race to the Bottom." You get a lower FOB price, but a 200% higher-risk "landed cost."
The Right Negotiation (with "Prototype 3"):
Talk "Value Engineering": A professional negotiation isn't "I want it cheaper." It's "My target landed cost is $6.00. How can we work together to hit this target?" A "Prototype 3" factory (like TBCandle) will immediately respond: We can legally reduce costs by changing the packaging (e.g., from a color box to a kraft box) or simplifying the craft (e.g., from screen printing to a label), while never sacrificing the safety quality (Dimension 5) or fragrance quality (Dimension 4)—in short, never sacrificing "stability."
Talk "Long-Term": "Prototype 3" factories look for "partners," not "one-time orders." When you negotiate with a "committed annual volume," you get far more than a price discount. You get:
Priority Production (securing your peak season orders).
Flexible MOQs (to help you test new styles).
Value-Added Services (like the "proactive overage" from Dimension 7).
In summary: negotiating with "Prototype 1" gets you a lower FOB price and higher (unstable) risk. Negotiating with "Prototype 3" gets you a fair FOB price and the lowest, most predictable "True Landed Cost."