Procurement Cost

Procurement Cost refers to the total expenses paid by a foreign trade enterprise to acquire export goods or raw materials, including the purchase price, domestic transportation fees, loading and unloading charges, insurance premiums, packaging costs, warehousing fees, and related taxes (such as value-added tax and consumption tax). In export quotation calculation, procurement cost is the basis for calculating the total export cost. It is usually necessary to convert the tax-inclusive procurement cost into a tax-exclusive cost to align with export tax rebates. Main usage scenarios include: export quotation, cost accounting, profit analysis, and supplier price comparison. Notes: Procurement cost is not equal to purchase price; the former includes additional expenses. It is necessary to distinguish between tax-inclusive and tax-exclusive procurement costs and consider the impact of export tax rebates on the actual cost. Unlike 'production cost,' procurement cost applies to traders or buyers, while production cost applies to manufacturers. Unlike 'landed cost,' procurement cost covers only the procurement stage and does not include international freight and insurance.