Analysis of the Differences between the Factory Price and Ex-Factory Price of Cake Cabinets

When purchasing a cake display cabinet, do you often hear the two terms "factory price" and "ex-factory price"? Many people think they have similar meanings, both referring to the price given at the production source. However, in fact, there are many subtle yet crucial differences between them.

In terms of the conceptual essence, the ex-factory price refers to the price set by the cake display cabinet manufacturer when delivering the product to the purchaser in the factory warehouse after production. This price only covers the production cost of the product and the minimum profit expected by the manufacturer. It is the basic price at which the product leaves the factory and does not include any additional costs such as subsequent transportation, installation, and after-sales service. In contrast, the factory price has a broader scope. It is a price formed based on the ex-factory price after comprehensively considering various factors. In addition to production costs and profits, the factory price may also include transportation costs, packaging costs, installation and commissioning costs, and even a certain amount of after-sales service costs.

The influencing factors of pricing are also significantly different for the two. The core determinant of the ex-factory price is the production cost, which includes the cost of raw materials, such as the procurement costs of glass, steel, refrigeration equipment, etc., required for making the cake display cabinet; the labor cost during the production process, covering the wage expenditures of workers on the production line and technicians; as well as manufacturing expenses such as the depreciation of production equipment and water and electricity costs. Based on these costs and the minimum profit rate set by itself, the manufacturer formulates the ex-factory price to ensure that it can make a profit after selling the product and maintain the normal operation of the factory. In comparison, when setting the factory price, in addition to considering the above production costs, factors such as market demand, sales channels, and regional factors also need to be taken into account. If the market demand for cake display cabinets is strong, the manufacturer may appropriately increase the profit margin in the factory price. For different sales channels, such as direct sales to retailers and sales to distributors, the factory price will also vary. Moreover, considering the transportation distance and logistics costs in different regions, the factory price of cake display cabinets sold to more distant areas may be higher than that sold locally.

To understand the differences between the two more intuitively, we can illustrate through practical cases. Suppose a cake display cabinet manufacturer produces a batch of standard-sized cake display cabinets. The raw material cost of a single product is 800 yuan. Converted at the exchange rate of 1 US dollar to 7.1903 yuan on May 22, 2025, it is approximately 111.26 US dollars. The labor cost is 200 yuan, approximately 27.81 US dollars. The manufacturing cost is 100 yuan, approximately 13.90 US dollars. The manufacturer sets a minimum profit rate of 10%. According to the calculation method of the ex-factory price, the ex-factory price of a single cake display cabinet is (800 + 200 + 100)×(1 + 10%) = 1210 yuan, converted to US dollars is approximately 168.28 US dollars.

If the manufacturer sells to local retailers, considering that the average local transportation cost for each cake display cabinet is 50 yuan, approximately 6.95 US dollars; the packaging cost is 20 yuan, approximately 2.78 US dollars; the cost of providing installation and commissioning services for retailers is 30 yuan, approximately 4.17 US dollars; and a certain amount of after-sales service cost of 20 yuan, approximately 2.78 US dollars. Then the factory price at this time is 1210 + 50 + 20 + 30 + 20 = 1330 yuan, converted to US dollars is approximately 184.97 US dollars. If it is sold to other places, the transportation cost increases to 100 yuan, approximately 13.90 US dollars, and the factory price will become 1360 yuan, converted to US dollars is approximately 189.14 US dollars. It can be seen that in actual transactions, the factory price is higher than the ex-factory price due to various additional costs.

For purchasers, it is important to understand the factory price and ex-factory price of cake display cabinets. If the purchaser has a complete logistics transportation and installation team and can bear certain after-sales risks on its own, then purchasing cake display cabinets directly at the ex-factory price can minimize the procurement cost. However, if the purchaser lacks relevant resources and capabilities, although choosing to purchase at the factory price is slightly more expensive, it can enjoy one-stop services, including transportation, installation, and after-sales guarantee, which reduces the purchaser's energy and time costs to a certain extent. In the long run, it is also a reasonable choice.