SuanSupplyWhat is landed cost?
Landed cost is what one unit of your product really costs by the time it reaches your warehouse or fulfillment center. It includes the supplier's price, plus everything it takes to get the goods to you: freight, insurance, duties, customs fees and delivery.
It's the number your pricing should be based on. Many first-time importers price from the supplier's quote alone, then find freight, duties and fees have wiped out most of their margin.
The landed cost formula
Include every cost you pay to get the order into your hands. Selling costs, like platform fees, fulfillment and advertising, come afterwards and belong in your profit calculation, not your landed cost.
What to include
- Product cost: the supplier's unit price times your quantity, usually quoted FOB (loaded at the port in the supplier's country).
- Packaging and labels: custom boxes, inserts, barcodes and Amazon FNSKU labels.
- Samples, tooling and inspection: sample fees, mold or setup costs, and a pre-shipment quality check.
- Freight and insurance: sea, air or express shipping to your country.
- Duties and tariffs: based on your product's HS code and country of origin. Some countries charge duty on the product value alone (FOB), others on the product plus shipping (CIF).
- Broker, port and delivery fees: customs clearance, terminal handling and trucking to your warehouse or 3PL.
A worked example
Here's an illustrative example of a typical small order. An order of 1,000 silicone utensil sets quoted at $3.20 each would land at about $6.04 per unit once packaging, inspection, sea freight, duties and delivery are added. That's nearly double the supplier price. Selling on Amazon at $24.99, after a 15% referral fee and about $5.50 in FBA fees, would leave roughly $9.70 profit per unit, with a break-even price of about $13.60. Your own numbers will depend on your product, supplier, shipping method and country. The calculator above starts with this example, so you can see how each cost adds up.
How to lower your landed cost
- Get carton sizes before comparing quotes. Freight is priced by weight and volume, so a product that packs smaller can cost far less to ship.
- Order larger quantities when cash flow allows. Fixed costs like broker fees and inspection are spread over more units.
- Check your HS code carefully. The right classification can change your duty rate significantly. A customs broker can confirm it.
- Compare sea and air freight. Air is faster, but sea freight is usually much cheaper for heavier orders.
Want the full version?
Our Pricing and Landed Cost Calculator adds CNY supplier quotes, VAT and GST, target-margin pricing, a sale-by-sale breakdown and side-by-side product comparisons. It works offline, with no subscription.
Frequently asked questions
What is the difference between landed cost and product cost?
Product cost is what you pay the supplier. Landed cost adds everything needed to get the goods to your door: freight, insurance, duties, customs and delivery fees. Landed cost is the number to base your selling price on.
Are duties calculated on FOB or CIF value?
It depends on the importing country. The United States generally calculates duty on the product value (FOB), while Canada, the UK, the EU and Australia generally use the product value plus shipping and insurance (CIF). Check with your customs broker for your specific product.
Should Amazon FBA fees be included in landed cost?
No. FBA fees, referral fees and advertising are selling costs, so they go into your profit calculation rather than your landed cost. This calculator shows both: landed cost first, then profit after selling costs.
How do I find my duty rate?
Look up your product's HS code in your country's tariff schedule, then add any extra tariffs that apply to goods from the country of origin. Tariffs on goods from China change often, so confirm the current rate with a customs broker before ordering.
This calculator gives estimates for planning. Check actual rates and fees with your platform, customs broker or accountant before making decisions.