Free Tool

Landed Cost Calculator

Calculate the total cost of importing products including shipping, customs duty, insurance, VAT, and brokerage fees. Find your true per-unit landed cost.

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Formula

Landed Cost = Product Cost + Shipping + Customs Duty + Insurance + VAT/Tax + Brokerage Fees

What is Landed Cost?

Landed cost is the total cost of importing a product from a supplier to your warehouse or customer's door. It goes far beyond the unit price — including international shipping, customs duties, import taxes (VAT/GST), insurance, and brokerage fees.

For e-commerce sellers sourcing from China, India, or other overseas suppliers, understanding landed cost is critical because it directly determines your true product cost and therefore your actual profit margin.

Landed Cost Components Explained

  • Product Cost (FOB): The price you pay the manufacturer, usually quoted as FOB (Free On Board) — meaning the supplier covers costs until goods are loaded onto the ship
  • International Shipping: Ocean freight, air freight, or express courier costs to move goods to your country
  • Customs Duty: A tax imposed by the destination country based on the product's HS code and declared value
  • Insurance: Typically 1-3% of the shipment value — protects against loss or damage in transit
  • VAT / Import Tax: Value-added tax or sales tax applied at the border, usually calculated on (product cost + shipping + duty)
  • Brokerage Fees: Customs broker charges to handle import paperwork and clearance — usually $50-$150 per shipment

How to Reduce Landed Costs

  • Negotiate FOB pricing: Get quotes from multiple suppliers and negotiate volume discounts
  • Optimize shipping mode: Sea freight is 5-10x cheaper than air freight for non-urgent orders
  • Consolidate shipments: Combine multiple SKUs into one shipment to spread fixed costs
  • Classify HS codes correctly: Some product categories have lower duty rates — ensure you're using the most favorable accurate code
  • Use free trade zones: Some countries offer duty-free import for goods that will be re-exported

Frequently Asked Questions

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