Landed Cost Calculator
Calculate the true total cost of imported goods including shipping, duties, and taxes.
Calculation Results
What Is Landed Cost Calculation?
Landed cost calculation is the comprehensive process of determining the total price of a product once it has arrived at the buyer's doorstep or warehouse. Unlike the simple "unit price" offered by a manufacturer, the landed cost encompasses every single expense incurred during the procurement and transportation process. For international trade, this includes the original price of the item, all shipping and freight charges, customs duties, insurance, handling fees, and local taxes. Understanding this figure is critical for businesses to maintain profitability. If a company only accounts for the purchase price, they might set retail prices too low, leading to unexpected losses when the "hidden" costs of importation are finally realized. High-precision calculations are necessary for accurate inventory valuation and competitive pricing strategies in global ecommerce and supply chain management.
How the Calculator Works
Our Landed Cost Calculator utilizes a standardized financial formula to aggregate multiple data points into two primary outputs: Total Landed Cost and Per-Unit Landed Cost. The logic follows a "Bottom-Up" approach. First, it calculates the base value of the goods (Price x Quantity). Then, it calculates the Customs Duty based on that value. Next, it calculates Import Taxes (like VAT or GST), which in many jurisdictions are applied to the "Duty-Paid Value" (Product Value + Shipping + Insurance + Duty). Finally, it adds all handling and ancillary fees. By breaking down these components, the calculator provides a transparent view of where your money is going, allowing you to identify if high shipping rates or excessive duties are eating into your margins.
Why Use Our Calculator?
1. Eliminate Hidden Expenses
Importing goods often involves "surprise" costs like port handling fees or fuel surcharges. Our tool encourages you to input every variable so you are never caught off guard by a bill from your freight forwarder.
2. Optimize Pricing Strategy
To run a profitable business, you must know your break-even point. This calculator tells you exactly what an item costs you to possess, enabling you to set a retail price that guarantees a healthy margin. You can also use our Profit Margin Calculator to further refine your strategy.
3. Better Supplier Comparison
One supplier might offer a lower unit price but be located in a country with much higher duty rates. By calculating the landed cost, you can compare different vendors on an "apples-to-apples" basis to see who is truly the most cost-effective partner.
4. Inventory Accuracy
Accounting standards (like GAAP or IFRS) often require businesses to include shipping and import costs in the value of their inventory. This calculator helps your finance team record the correct "capitalized cost" of your stock.
5. Strategic Logistics Planning
By adjusting variables like freight costs or quantities, you can see how bulk shipping affects your per-unit cost. This helps in deciding whether to ship by air (fast but expensive) or by sea (slow but cheap). You may also want to consult U.S. Customs and Border Protection for official duty guidelines.
How to Use the Calculator
Using the tool is straightforward. Follow these steps for the most accurate results: 1. Enter the price you paid the manufacturer for a single unit. 2. Enter the total number of units in the shipment. 3. Input the total freight cost provided by your carrier. 4. Determine the duty rate for your specific HS Code (Harmonized System) and enter the percentage. 5. Add the local tax rate (such as VAT or GST). 6. Include any miscellaneous fees like insurance or broker charges. 7. Click "Calculate" to see the breakdown.
Example Calculations
Example A: You buy 100 units of a product at $50 each ($5,000 total). Shipping is $500, Duty is 5%, and VAT is 10%. Your total landed cost would be approximately $6,325, making the per-unit cost $63.25 instead of the initial $50.
Example B: An electronics shipment from Asia with high duty rates. 50 units at $200 each ($10,000). Freight is $1,200. Duty is 25%. Insurance is $100. The landed cost per unit jumps significantly to nearly $290 per unit after accounting for the heavy tariffs.
Use Cases
This tool is essential for Ecommerce Sellers (Amazon FBA/Shopify) who need to calculate COGS (Cost of Goods Sold) accurately. It is also vital for Procurement Managers in manufacturing who are sourcing raw materials from overseas. Small Business Owners who are just starting to import can use this to avoid the common mistake of underestimating the impact of duties and taxes. For more information on trade regulations, visit the International Trade Administration.
Frequently Asked Questions
What is the difference between FOB and Landed Cost?
FOB (Free on Board) usually only includes the cost of the goods and the cost to get them onto the ship. Landed cost includes everything from the factory to your warehouse, including the ocean freight, insurance, and local taxes.
Does this calculator include "Demurrage" fees?
It can! You should include any potential demurrage or port storage fees in the "Other Fees" field to get an accurate total.
Is VAT always included in landed cost?
It depends on your business. If you are VAT-registered and can claim the tax back, you might exclude it from your internal COGS, but for initial cash flow planning, it should always be calculated. Check our Freight Calculator for more shipping-specific details.
How do I find my Duty Rate?
You need to find your product's HS Code. You can search for this on government customs websites or ask your manufacturer for the code they use on the commercial invoice.
Why is the per-unit cost so much higher than the price I paid the supplier?
This is common in international trade. Shipping and duties can often add 20% to 50% to the base price of the product, especially for heavy items or products from countries with high trade tariffs.
Conclusion
Mastering landed cost calculation is a non-negotiable skill for any professional involved in importing and global trade. By using this calculator, you move beyond guesswork and base your business decisions on hard data. Whether you are a solo entrepreneur or a large-scale distributor, knowing your true costs is the first step toward long-term sustainability and profit. Ensure you update your calculations regularly as shipping rates and international trade policies fluctuate.