What goes into landed cost
- Product — the supplier's per-unit price.
- Freight — shipping allocated per unit.
- Duty — a percentage of the customs value (commonly product + freight).
- Insurance — cargo cover, typically a small percentage of value.
- Clearance — broker and customs fees, fixed per shipment, so they shrink per unit as quantity rises.
Why the per-unit number moves with order size
The percentage costs (duty, insurance) scale with each unit, but clearance and broker fees are fixed per shipment. Order 100 units and a $150 broker fee adds $1.50 each; order 2,000 and it adds 7.5 cents. That's why landed cost per unit falls on larger orders — and why tiny test orders can look deceptively unprofitable.
A worked example
An $8 unit with $2.50 freight, 6% duty, 1.5% insurance, and a $150 clearance fee across 500 units lands at roughly $11.55— about 44% over the sticker. Price that product at a "keystone" 2× of the supplier quote ($16) and your real markup is far thinner than it looks, and thinner still once payment fees and returns come out. Landed cost is the floor; build your price up from it, not from the quote.
How to use it
Run it before you commit to a price or a purchase order, and once you know your true unit cost, carry it into the break-even ROAS calculator to see what you can actually pay to acquire a sale. The full margin picture is in the ecommerce profit playbook.
Frequently asked questions
What is landed cost?
Landed cost is the total cost of a product once it has arrived at your warehouse ready to sell — the supplier price plus freight, import duty, insurance, and customs clearance or broker fees. It's the number you should price and calculate margin from, because the supplier's per-unit quote ignores everything it takes to actually get the goods to you.
How do you calculate landed cost per unit?
Add the product cost, the freight allocated to each unit, the import duty (a percentage of the customs value, usually product plus freight), insurance, and any fixed shipment fees — broker and clearance charges — divided across the units in the shipment. Fixed fees fade as quantity rises, which is why landed cost per unit drops on larger orders.
Is duty charged on shipping as well as the product?
Often, yes. Many customs regimes assess duty on the 'customs value', which commonly includes freight and insurance (CIF basis), not just the product price. This calculator applies duty to product plus freight by default. Rates and the exact dutiable base vary by country and product code, so confirm your HS code and import terms before relying on a figure for a real order.
Why does landed cost matter for pricing?
Because pricing from the supplier quote alone quietly underprices you. If a $8 unit actually lands at $11 after duty, freight, and clearance, a markup you thought was healthy can be barely break-even — and worse once payment fees, returns, and ad spend come out of it. Landed cost is the real floor your retail price has to clear.
Independent analysis, not customs advice. Duty rates and the dutiable base vary by country and HS code — confirm yours before relying on a figure.