Landed Cost Calculator — True Per-Unit Cost of Imported Goods
True per-unit cost of imported goods.
Product
Shipping
Customs
Handling
Results
- Total product cost
- $10,000.00
- Total shipping & insurance
- $1,350.00
- Total duties & customs
- $1,000.00
- Total handling
- $300.00
- Total landed cost
- $12,650.00
- Landed cost per unit
- $12.65
- Cost multiplier
- 1.27×
Multiplier = landed cost ÷ product cost. A multiplier of 1.30× means every $1 of supplier price becomes $1.30 at your warehouse door.
Stop calculating. Start sourcing smarter.
Sourcing teams that compare quotes on unit price alone overpay by 15–40%. Procupy lets vendors submit full landed-cost quotes — freight, duty, handling — so you compare apples to apples in a single auction.
- Live reverse auctions with real-time savings
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What is landed cost?
Landed cost is the TRUE cost of a unit at your warehouse door, not just the supplier's invoice price. It rolls up everything between the factory and your receiving bay: product cost, ocean or air freight, marine insurance, customs duty, brokerage and customs fees, handling, port charges, and inland transport. Without this number, you can't honestly compare two suppliers, choose between Incoterms, or set a defensible target margin.
Landed cost formula
Landed Cost = Product Cost + Shipping + Insurance + Duties + Customs Fees + Handling + Local Transport
Worked example. You're importing 1,000 units at $10/unit = $10,000 product cost. Add ocean freight of $1,200 and marine insurance of $150. Customs duty at 8% on the $10,000 product cost is $880, plus $200 of brokerage and customs clearance fees. Handling at the port and inland trucking to your DC adds another $300. Total landed cost = $12,730, which works out to $12.73/unit — a 1.27× multiplier on the supplier's list price. If you sized your sell price off the $10 figure, you've quietly given away almost a third of your margin.
Why suppliers' lowest quote is rarely the cheapest
- Longer lead times = higher carrying cost. A 12-week ocean route ties up working capital for three months and forces larger safety stocks. The "savings" on FOB price vanish into inventory cost.
- Distant suppliers = higher freight. A factory two countries closer often beats a "cheaper" supplier once you add per-container freight and fuel surcharges.
- Lower-quality materials = higher returns and rework. Defect rates of 2–5% on a cheaper SKU can wipe out a 10% unit-price win — and that's before you count the cost of customer churn.
- Weak documentation = customs delays. Suppliers who don't ship complete invoices, packing lists, and certificates of origin cost you demurrage, detention, and emergency air freight.
How to reduce landed cost
- Consolidate shipments. Merge multiple POs into a single FCL or air consol to spread fixed freight, brokerage, and documentation charges across more units.
- Negotiate Incoterms. Moving from EXW to FOB shifts inland-origin handling to the supplier; moving to DDP transfers the whole logistics chain. The right Incoterm depends on which party has better freight rates and customs expertise.
- Use bonded warehouses. Defer duty payment until goods are sold and released. Useful when cash is tight or when reselling to export markets.
- Run reverse auctions on FULL landed cost. Most teams run e-auctions on unit price only — Procupy lets you collect freight, duty, and handling line items in the same bid sheet so vendors compete on the number that actually matters.
- Audit duty classifications (HS codes). A single-digit change in your HS code can move the duty rate by 5–15 percentage points. Run an annual classification review with a customs broker.
FAQs
What's the difference between FOB and landed cost?
FOB (Free On Board) is the price of the goods loaded onto the ship at the supplier's port — it excludes ocean freight, insurance, duties, customs clearance, and inland transport to your warehouse. Landed cost is the all-in figure: FOB price plus every cost incurred to get the goods to your door. FOB is useful for comparing supplier list prices, but only landed cost reflects what you actually spend per unit. A supplier with a 5% lower FOB but a longer route and higher duties can easily be 10–15% more expensive on a landed-cost basis.
Should I include taxes in landed cost?
Include non-recoverable taxes — anything you cannot reclaim through input tax credits, like customs duty, anti-dumping duty, excise on imports, and any import surcharges. Exclude recoverable taxes like GST/VAT input credits, since they flow back to you and don't represent a true cost. The general rule: if the tax stays on your P&L, it belongs in landed cost; if it can be offset against output tax, it doesn't.
How do duties affect landed cost?
Duties are typically calculated as a percentage of the assessable value (often CIF — Cost + Insurance + Freight) and can range from 0% to 30%+ depending on the HS code and origin country. On a $10,000 product shipment with $1,350 of freight + insurance and an 8% duty, the duty alone adds ~$908 — about 9% on top of the supplier price. Free trade agreements (FTAs) can drop duty rates to 0%, so always check whether your origin country qualifies for preferential tariffs before assuming the standard rate.
Can I lower landed cost without changing suppliers?
Yes — several levers don't require switching vendors. Consolidate multiple POs into a single shipment to spread fixed freight costs. Renegotiate Incoterms (e.g. move from EXW to FOB, or FOB to CIF) so the supplier absorbs more of the inbound logistics. Audit your HS code classifications — misclassification is the #1 source of overpaid duty. Use bonded warehouses to defer duty payment until goods are sold. Switch shipping mode (LCL vs FCL, sea vs air) based on order economics. Finally, run reverse auctions on full landed cost so logistics providers and freight forwarders compete on the same denominator.
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