Local Wholesaler or Direct Import for a Construction Package: A Worked Landed-Cost and Programme Comparison

You have two prices for the same package. The local wholesaler's is per square metre, delivered to site, on 30-day account. The factory's is in US dollars, free on board at a Chinese port, with a 30% deposit. The factory number looks like half the wholesaler's. The decision turns on three things the unit prices leave out: what it costs to land the goods, what it costs to fund them, and what it costs if they arrive late.

This comparison works through one package, porcelain floor tiles for an apartment building, both ways. Then it changes one input, the quantity, and the answer reverses.

The Package and the Two Offers

The exchange rate is the September 2026 monthly average, 0.7115 US dollars per Australian dollar (S1); every other figure is invented to show the method.

A Sydney builder needs 2,400 m² net of 600 x 600 mm rectified porcelain tile for a Class 2 apartment building, with tiling due to start in 13 weeks.

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The larger allowance on the import is not padding. If breakage or a measurement error leaves you short, a second order takes another three months and may not match the first batch in shade.

Landed Cost, Line by Line

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Against the wholesaler's 2,520 x 38.00 = $95,760, the import saves 95,760 less 52,301 = $43,459. Per net square metre: 52,301 / 2,400 = $21.79 against 95,760 / 2,400 = $39.90. Finance is charged at an assumed 9% a year from the day each payment leaves until week 17, when the wholesaler would have been paid on 30-day account.

Notes on the lines that most often go missing:

• Duty. The 5% is an assumption for the arithmetic. Confirm the rate, and whether a free trade agreement preference applies, with a licensed customs broker before you rely on the saving.
• Asbestos testing. Tiles are on the Australian Border Force's list of goods that might contain asbestos (S2). Budget for testing every shipment; see the documents to get before you order Publication held.
• Finance. The deposit is your cash in the factory's account for 17 weeks. The method is in what a supplier deposit really costs Publication held.
• Currency. The buffer covers a move between order and payment. Fix the rate with a forward contract or keep the buffer.

For quotes on different delivery terms, the conversion method is in compare quotes on different Incoterms Publication held, and the general principle in landed cost vs unit price.

Programme: The Cost the Quotes Do Not Show

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The import lands two weeks before tiling. If any stage slips by more than the buffer, the tilers are rescheduled.

Suppose a late delivery costs $2,500 a working day in idle trades, re-sequencing and supervision, and there is a one-in-four chance that production or shipping slips five weeks, which uses the buffer and delays tiling by 15 working days. The expected cost is 25% x 15 x 2,500 = $9,375. The worst case is 15 x 2,500 = $37,500.

At this quantity the import still wins, even in the worst case, provided the order goes in on time. Pin the factory to a date with the method in supplier lead times Publication held.

The Same Decision at 600 m²

Change one input. A fit-out needs 600 m² net. The wholesaler supplies 630 m² for 630 x 38.00 = $23,940. The import is 660 m², shipped part-container.

The saving before risk is 23,940 less 14,851 = $9,089. The delay risk has not shrunk with the order: the expected cost is still $9,375. After risk, the import is $286 worse. Testing, inspection and clearance cost much the same for 600 m² as for 2,400 m², and the programme exposure is identical.

Decision Rules

These are judgement thresholds, not rules. The honest answer is sometimes to stay with the wholesaler and use the import quote to ask for a better local price.