Compare factory quotes with free components
Add your component costs and delivery to the factory to the free-supply quote when comparing order costs. For customs, add only the component value missing from the seller’s price, with other relevant adjustments. Keep the cash and customs workings separate. Cambridge China Bridge can help reconcile the quotes.
Fix the component scope before comparing
Use the supplier quote comparison guide for the common specification, quantity and delivery scope. Here, the extra task is to identify who pays for each component. Ask the purchasing factory to confirm that its price includes the same component specification, rather than a cheaper substitute.
Ask the free-supply factory to confirm what its price excludes and what it charges for receiving, checking, storing and handling your components. Agree responsibility for shortages, damaged parts, production losses and unused stock. These differences can erase an apparent saving.
Build a complete order-cost comparison
For the free-supply route, combine the factory payment with your component purchase or production cost, delivery to the factory and any separately charged handling. For the factory-purchase route, start with its component-inclusive price. Add the remaining order costs on the same basis, using the landed-price guide for the wider cost layers.
If you already hold the components, show their cost allocated to the order separately from cash still to be paid. This prevents existing stock from appearing costless while avoiding a second purchase payment in the cash forecast. Keep payment timing visible and mark unresolved costs as unconfirmed.
| Comparison line | Buyer supplies components | Factory purchases components |
|---|---|---|
| Factory payment | Price excluding supplied components | Price including purchased components |
| Component cost | Show buyer’s allocated cost separately | Already included if confirmed by factory |
| Delivery of components to factory | Show buyer’s actual charge separately | Check whether included or separately charged |
| Remaining order costs | Add costs not already included | Add costs not already included |
Reconcile the customs value separately
Under HMRC’s transaction-value guidance, buyer-supplied components incorporated in the imported goods must be included to the extent their cost or value is absent from the seller’s price. For the free-supply route, identify that missing value. For the factory-purchase route, do not add a separate component value if it is already included in the price.
Use a reconciliation showing the seller’s price, the component value already included, the missing component value and the other applicable valuation adjustments. A component addition changes the customs calculation; it is not another payment to the factory. The customs-value guide covers the wider additions and deductions.
Separate component value from outward freight
HMRC’s detailed guidance includes the full acquisition or production cost of buyer-supplied materials in customs value. It excludes outward freight and insurance where separately distinguishable. Where the acquisition charge bundles those costs inseparably, they remain included. Ask your customs agent to check the invoices before using the cash comparison’s component total as the customs addition.
Request separate component, freight and insurance lines wherever possible. Match the component records to the production batch and imported shipment, and reconcile unused stock and losses. Do not allocate an entire component purchase to a shipment merely because the purchase invoice was paid before that shipment.
Send a reconciliation pack before choosing
Send the customs agent the factory quotes, component purchase invoices or production-cost records, delivery charges and a batch reconciliation. Ask them to confirm the valuation basis and the treatment of each disputed line. If the arrangement is processing without a sale, HMRC says the transaction-value method cannot be used; have the agent confirm the appropriate method.
Choose after reviewing the complete order cost, remaining cash payments and customs workings alongside component control and factory capability. Cambridge China Bridge’s own staff in China can help clarify the factory scope and component records before you commit.
Frequently asked questions
Is a factory quote excluding free components cheaper?
Not necessarily. Add your allocated component cost, delivery to the factory and separate handling before comparing it with a component-inclusive quote.
Do free components count in UK customs value?
Yes, where buyer-supplied components are incorporated in the imported goods, HMRC requires the cost or value missing from the seller’s price to be included.
How do I avoid counting components twice?
Confirm whether the factory price includes them. Show your separate component cost only where needed in the order comparison, and add only the missing component value in the customs calculation.
What if I already own the components?
Show their allocated cost in the order comparison and distinguish it from cash still payable. Existing stock does not remove the customs-value treatment of buyer-supplied components.