LANDED COST
Landed cost is the sum of all costs involved in getting the product from the factory to the buyer’s destination. It includes costs that are associated with moving the product from its country of origin to the buyer’s location, product packaging, transportation, customs duties and taxes.
Total landed cost is the total cost of the product, including transport, customs, duties, taxes, tariffs, insurance, currency conversion, crating and handling fees.
- Product cost – This includes the cost of manufacturing and sourcing the raw materials of the product.
- Transportation fees (Inland and Ocean) – This includes the cost of shipping the product to your customer’s door. Handling fees, brokerage fees, freight cost and transportation costs all make your shipping expenses.
- Customs duties and taxes – When you’re shipping goods internationally, each country has customs duties and taxes associated with importing and exporting goods.
- Insurance – Insuring your product protects you from lost, stolen, or damaged goods. However, its cost depends on the category and value of the shipped goods.
- Overhead cost – Overhead includes operating expenses such as employee salaries, payment processing fees, exchange rates and any other costs associated with daily business operations.
Learn more about duties and taxes.
A landed cost is the total amount of money it costs a vendor to create a product, transport it, and have the customer receive it. This includes not only shipping and raw materials, but any additional fees such as import duties, shipping insurance, and other related costs.
You can't run a business without knowing your costs.
If you're selling internationally, you know that there's no way to predict exactly how much it will cost to ship an item from your location abroad. What's more, your customers don't want to be surprised with unexpected extra costs upon receiving their order.
The landed cost is the sum of all the international shipping and import duties, taxes and other fees associated with an order. This includes the price of goods, packaging, transportation, insurance and any importation charges.
Landed cost is usually presented to customers at checkout in an easy-to-understand breakdown. This allows them to make a fully informed decision about whether or not they want to proceed with their purchase. It also helps build trust between you and your customers, as they know exactly what they will be paying for before they make the purchase.
It’s important that you provide your customers with a clear understanding of all costs associated with their order so they can make informed choices about their purchases.
Besides that, when you have an understanding of landed cost, you can better understand how much profit is left after all the expenses have been accounted for. Knowing how much profit there is in your product helps you price your products correctly, so that they're competitive with similar items on the market. It also helps you make better-informed decisions about pricing and where you source products from in the future.
We know how hard it is to figure out the total cost of exporting and importing shipments. That’s why we provide the Landed Cost Calculator, a simple calculator that estimates duties, taxes, shipping costs, and more — giving you the power to make better pricing decisions.