Insights · Guide
Understanding landed cost
Why the supplier price is only part of what you pay.
Landed cost is the total cost of getting a product to your door, not just the price the factory quotes. Comparing landed costs, rather than factory prices, gives a truer picture.
Common parts of landed cost
- Product cost: the supplier's price.
- Freight: ocean or air shipping, plus local charges at origin and destination ports.
- Insurance: cover for goods in transit, if arranged.
- Duties and tariffs: taxes on imports, based on the product's tariff classification (HTS code) and country of origin.
- Customs fees: for US imports, these can include fees such as the Merchandise Processing Fee and Harbor Maintenance Fee, plus your customs broker's charges.
- Inland delivery: trucking from the port to your warehouse.
- Other costs: inspection, testing, packaging changes or storage.
A simple way to think about it
Landed cost per unit = (all of the above) ÷ (number of units). Estimates change with freight markets and trade rules, so confirm current figures with your customs broker and freight provider before you order.
This guide is general information to help you get started. It is not legal, tax or customs advice. For your specific situation, consult a licensed customs broker or adviser, or talk to our team.