Landed Cost
Landed cost is the total cost of getting a product to your door, including the supplier price, freight, insurance, duty and fees.
The supplier price is only part of what an imported product costs. Freight, insurance, customs duty, brokerage and port fees can add a large percentage, especially for bulky or low-value goods.
Using landed cost instead of the supplier price gives you a true cost per unit for pricing, margin and profit decisions.
Formula
Landed cost = Goods + Freight + Insurance + Duty + Fees
Landed cost per unit = Landed cost ÷ Units
Example
500 units cost 4,000. Freight is 600, duty is 200 and fees are 150, so landed cost is 4,950, or 9.90 per unit.
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Common questions
Is import VAT or GST part of landed cost?
Usually not for registered businesses that can reclaim it.
How do I split freight across products?
By units, or by weight or volume for mixed shipments.