This page explains the main factors that separate one sourcing origin from another, for a merchandiser or sourcing manager who must choose where to place a new order before any factory is confirmed. This lesson mainly teaches information: what a sourcing origin actually is, and which of its own factors change an order's outcome enough to matter. Mona, the merchandiser at Delta Garments, meets this decision whenever Northline Apparel asks whether an order should stay with Delta Garments or move to a factory in a different region.
A person who only compares two factories on their quoted factory price can pick the wrong sourcing origin, because price is only one of several factors that decide what an order actually costs and when it actually arrives. Two factories can quote the same price and still leave a buyer with very different landed costs, lead times, and minimum order quantities once freight, duty, and distance are added in. Without a fixed list of the factors that matter, a buyer risks choosing an origin on price alone, then meeting a cost or delay a wider comparison would have shown from the start.
You need: no previous lesson is required, though Course 1 (Supplier Sourcing and Qualification) and Course 2 (RFQ and Supplier Quotation Comparison) are useful background for how a factory is first found and quoted.
By the end of this lesson you can:
Not covered here: turning these factors into one comparable cost figure (lesson 5.2); how lead time and minimum order quantity on their own can shift the right choice (lesson 5.3); splitting one order across two origins at once (lesson 5.4).
| Term | Meaning |
|---|---|
| FOB price | The price the factory charges for the garment, delivered on board the ship at its own port. |
| Landed cost | The FOB price plus shipping and duty once goods reach the buyer's own country, USD 3.70 per piece on Order A. |
| Delivered cost | The buyer's true cost once the goods have reached its own warehouse: the ex-factory price plus delivery, freight, insurance and duty for an imported order, or local transport for a domestic one. |
| Lead time | The total time from a confirmed order to the goods reaching their destination. |
| Minimum order quantity | The smallest amount a mill or factory will accept or process as one order. |
| Sea freight | Moving goods by ship. Slower and much cheaper per unit of weight than air freight. |
| Air freight | Moving goods by aeroplane. Much faster and much more expensive per unit of weight than sea freight. |
A sourcing origin is the country or region where a factory that could make an order is actually located, and that location sets a whole group of factors at once, not just the price on the quotation. The four factors that matter most are the factory's own price for the garment, the freight cost and duty that get it from that factory to the buyer, the lead time the distance and the factory's own workload add, and the minimum order quantity the factory will accept. A nearer origin typically offers a shorter lead time and a lower minimum order quantity, often at a higher unit price; a farther origin may offer a lower unit price, but with a longer lead time and a higher freight and duty cost once the goods actually travel. Comparing two origins on price alone hides the other three factors, and any one of them can turn a cheaper quotation into a more expensive, or a less workable, order.
| What can differ | The shapes you meet | Why it matters |
|---|---|---|
| Export, Make to Order, near origin | Delta Garments, in the region nearer Northline Apparel's own distribution, quotes Order A's T-shirt at FOB USD 3.20 per piece, with a shorter lead time and a lower minimum order quantity of 15,000 pieces. | A nearer origin usually protects lead time and minimum order quantity, which matters most when Northline Apparel needs the goods on a fixed shop date. |
| Export, Make to Order, far origin | Factory Y, an illustrative factory in a different, farther region, quotes a lower factory price for the same T-shirt, but a longer lead time and a higher minimum order quantity, since it produces in larger batches to keep its own price down. | A farther origin's lower price can still cost more once freight, duty, and a slower lead time are added, and its higher minimum order quantity can be unworkable for a smaller order. |
| Domestic, Make to Stock | Cedar & Co.'s domestic T-shirt order from Delta Garments never leaves the country, so it has no duty at all and a much shorter, more predictable lead time, even though its factory price may sit close to the export price. | A domestic sourcing origin removes duty and most freight variability entirely, changing the comparison from four factors to mainly factory price and lead time. |
| Other product families | A denim order such as Order B's jeans, needing 2 washes at Cairo Wash Works after sewing, adds a washing lead time that a T-shirt order never carries, so the same four-factor comparison must include the washing stage's own timing at whichever origin is chosen. | The four factors apply to any product family, but which stages add lead time, and where minimum order quantity is set, can differ by what the order actually is. |
Mona, the merchandiser at Delta Garments, is asked by Northline Apparel's buyer Sara to check whether a second production line for Order A's T-shirt should stay with Delta Garments or move to Factory Y, an illustrative factory Sara's own buying office has quoted in a different region. Mona pulls Delta Garments' own confirmed figures for Order A, FOB USD 3.20 per piece, landed cost USD 3.70 per piece, and a 16-week timeline, and sets them next to Factory Y's quotation: a factory price of USD 2.75 per piece, a delivered cost of USD 3.80 per piece once freight and duty from its region are added, a 22-week timeline, and a minimum order quantity of 20,000 pieces. Mona records both sets of figures on the Sourcing Origin Decision Guide's Compare sheet before recommending anything to Sara.
The worked numberThis lesson's worked number is not a single calculation but a side-by-side reading of the four factors for the two origins Mona is comparing.
A common mistake is comparing two sourcing origins only on the factory price line of their quotations, treating the lowest price as the cheapest and best choice without checking what freight, duty, lead time, and minimum order quantity add or remove. As the worked number shows, Factory Y's factory price is USD 0.45 per piece lower than Delta Garments', yet its delivered cost is USD 0.10 per piece higher once freight and duty are added, and its lead time is six weeks longer.
This trap costs real money and real time on every order it touches, not a one-time mistake. Choosing Factory Y for Order A on price alone would add USD 1,500 to the delivered cost of the whole 15,000-piece order (15,000 pieces x USD 0.10) while also pushing the goods six weeks later than Delta Garments' own confirmed 16-week timeline, a delay Northline Apparel's own shop dates may not allow.
Choosing where to have an order made is not only about which factory quotes the lowest price. The place a factory sits in, near or far from the buyer's own country, changes several things at once: how much it charges for the garment, how much it costs to ship and to pay duty on, how long the whole order takes from confirmation to arrival, and how many pieces the factory needs in one order to accept it at all. A factory that is farther away can quote a lower price and still end up costing more once shipping and duty are added, and it can take much longer to arrive. The only safe way to choose is to look at all of these together, not to pick whichever number looks best on its own.
Mona, the merchandiser at Delta Garments, is preparing her recommendation to Sara, the buyer at Northline Apparel, on where the second production run of Order A's T-shirt should be placed. The facts in front of her:
The document Mona reads, the Sourcing Origin Decision Guide's own Compare sheet output for this case:
Should Mona recommend Factory Y for its lower factory price, or recommend staying with Delta Garments? Decide before you open the answer.
She should recommend staying with Delta Garments. The Compare sheet's own output shows Factory Y's lower factory price does not survive once freight, duty, lead time, and minimum order quantity are added.
Three facts decide this. First, Factory Y's delivered cost of USD 3.80 per piece is USD 0.10 higher than Delta Garments' landed cost of USD 3.70, despite Factory Y's lower factory price. Second, Factory Y's 22-week timeline is six weeks longer than Delta Garments' 16 weeks, missing Northline Apparel's fixed shop date. Third, Factory Y's 20,000-piece minimum order quantity exceeds the 15,000 pieces actually needed.
Recommending Factory Y on price alone would cost Northline Apparel USD 1,500 more across the order (15,000 pieces x USD 0.10), miss its own shop date, and force ordering 5,000 pieces beyond what was needed.
This lesson's cost is what a price-only comparison would have cost Northline Apparel on Order A's second run. Choosing Factory Y for its lower factory price of USD 2.75 per piece instead of Delta Garments' USD 3.20 looks like a saving of USD 0.45 per piece, USD 6,750 across 15,000 pieces. Once Factory Y's higher delivered cost of USD 3.80 per piece is used instead, the real result is a cost of USD 0.10 per piece more than Delta Garments, USD 1,500 higher across the order, more than half of Order A's own USD 0.26-per-piece profit margin, USD 3,900 across the whole order, showing why the factory price line on a quotation is never the number that should decide a sourcing origin on its own.
Copy this row into the Sourcing Origin Decision Guide's Compare sheet, using the factory price, freight and duty, lead time, and minimum order quantity for the two origins you are comparing.
| Check point | Spec says | Found (your entry) | Result |
|---|---|---|---|
| Four-factor comparison of two sourcing origins | Enter factory price, freight and duty, lead time, and minimum order quantity for both origins and record which factors favour which origin |
Download the full working sheet, with Delta Garments and Factory Y's comparison already filled in, from the link on this course's page.
1. What four factors together decide a sourcing origin's real outcome for an order?
2. Factory Y quotes a lower factory price than Delta Garments for the same order, but a longer lead time and a higher minimum order quantity. What does this lesson's rule say about choosing between them?
3. A third, different order needs only 8,000 pieces. Factory Y's minimum order quantity is 20,000 pieces. What does this fact alone say about whether Factory Y can take this order?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| FOB price | سعر التسليم على ظهر السفينة | Prix FOB | FOB fiyatı | The price the factory charges for the garment, delivered on board the ship at its own port. |
| Landed cost | التكلفة بعد الوصول | Coût rendu | Teslim maliyeti | The FOB price plus shipping and duty once goods reach the buyer's own country, USD 3.70 per piece on Order A. |
| Delivered cost | تكلفة التسليم | Coût rendu | Teslim maliyeti | The buyer's true cost once the goods have reached its own warehouse: the ex-factory price plus delivery, freight, insurance and duty for an imported order, or local transport for a domestic one. |
| Lead time | الوقت الإجمالي للتنفيذ | Délai de production | Teslim süresi | The total time from a confirmed order to the goods reaching their destination. |
| Minimum order quantity | الحد الأدنى لكمية الطلب | Quantité minimale de commande | Minimum sipariş miktarı | The smallest amount a mill or factory will accept or process as one order. |
| Sea freight | الشحن البحري | Fret maritime | Deniz taşımacılığı | Moving goods by ship. Slower and much cheaper per unit of weight than air freight. |
| Air freight | الشحن الجوي | Fret aérien | Hava taşımacılığı | Moving goods by aeroplane. Much faster and much more expensive per unit of weight than sea freight. |
You now know the factors that separate one sourcing origin from another. The next lesson turns those factors into one number, landed cost, so two origins with different factory prices can actually be compared. Back to the course map