What is my true product cost?
Landed cost is the total cost of bringing a shipment into sellable inventory. Add supplier product cost, freight, duty and other import expenses, then divide by received units. Use the resulting unit cost when estimating product margin and pricing.
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The formula, explained.
Duty = customs value × duty rate Landed cost = product cost + freight + duty + all import costs Cost per unit = total landed cost ÷ units
A worked example
- Consider a shipment of 500 units with a total supplier invoice of $5,000. International freight is $600 and domestic freight is $200. Assume the customs value is also $5,000 and the applicable duty rate supplied by your broker is 4%. This example uses a declared rate; the calculator does not determine tariff classifications or customs treatment.
- Calculate duty as $5,000 × 0.04 = $200. Add $50 insurance and $75 brokerage, with all other shipment charges set to zero. Total landed cost is $5,000 + $600 + $200 + $200 + $50 + $75 = $6,125. Divide by 500 units to obtain a landed product cost of $12.25 per unit.
- Use $12.25 as the product cost in a subsequent order-profit calculation. Add selling fees, customer delivery and advertising there without counting inbound freight twice. If only 490 units become sellable, allocating the same shipment cost across those units gives $12.50 each. Check how damaged inventory, recoverable taxes and currency conversion should be treated in your own accounting before finalizing the input basis.
How to interpret your result
Use landed cost as the product-cost input in your profit calculator. Logistics per unit excludes product cost and duty but includes the remaining shipment costs entered here.
Common mistakes to avoid
Enter the total supplier invoice, not the per-unit price. Customs value can differ from invoice value. Supply your own applicable duty rate; this tool does not classify products or HS codes.
Frequently asked questions
What is my true product cost?
A 500-unit shipment costs $5,000 for products, $800 for freight and $200 for other import costs. Total landed cost is $6,000, or $12 per unit. Use landed cost as the product-cost input in your profit calculator. Logistics per unit excludes product cost and duty but includes the remaining shipment costs entered here.
What is the difference between landed cost and product cost?
Product cost is only the price paid to the supplier for the goods. Landed cost adds every cost required to get those goods into your warehouse: freight, duty, insurance, brokerage, and other import charges. Use landed cost, not product cost, as the cost input in a profit calculator, since product cost alone understates what each unit actually cost you.
Why is customs value different from the invoice value?
Invoice value is what you paid the supplier. Customs value is the value customs authorities use to assess duty, and it can include or exclude certain charges (such as freight or commissions) depending on the destination country's rules. Enter the customs value your broker or carrier uses for the duty calculation, not automatically the same figure as your supplier invoice.
How do I find the correct duty rate for my product?
The duty rate depends on your product's HS (Harmonized System) tariff classification and its country of origin. This calculator does not classify products or determine HS codes. Get the applicable rate from a customs broker, the destination country's tariff schedule, or your freight forwarder, then enter it as a percentage in the duty rate field.
What costs should I enter as 'other shipment costs' versus leave out?
Include any charge tied to getting this specific shipment from the supplier to your warehouse: inspection fees, port and terminal charges, non-recoverable taxes, and packaging or labeling done before arrival. Leave out costs that apply after the goods are in your warehouse, such as domestic last-mile shipping to customers or storage, since those belong in a separate profit or fulfillment calculation.
Why enter total product cost instead of price per unit?
This calculator divides your total supplier invoice cost by the number of units itself, using the unit count you enter separately. Entering a per-unit price instead of the total invoice amount will produce an incorrect total landed cost unless you first multiply it out by hand.
Can I change the assumptions?
Yes. All inputs can be edited, and advanced assumptions are available below the main inputs. Use values from the same period and currency. Changing display currency changes the symbol, not the underlying amount.
Are my financial numbers saved?
No. Calculations happen locally in your browser. Sharing creates a link containing the inputs, and exporting saves a CSV report to your device. You choose whether to share those artifacts.
Sources & methodology
Learn more about our calculation methodology and estimate limitations.