How to Calculate Landed Cost (Formula + Example)
The most common margin error in importing is treating the supplier invoice as your cost. Between the factory and your warehouse, freight, tariffs, and customs charges typically add 30–60% — and with current US tariff rates on many categories, sometimes far more. Landed cost is the number that captures it all.
The formula
Landed cost per unit = supplier price + (freight ÷ units) + (supplier price × duty & tariff rate) + (customs & broker fees ÷ units)
Worked example
500 units at $4.20 each, $600 ocean freight, 25% combined duty and tariff, $150 in brokerage:
- Supplier: $4.20
- Freight: $600 ÷ 500 = $1.20
- Duty & tariff: $4.20 × 25% = $1.05
- Customs/misc: $150 ÷ 500 = $0.30
- Landed: $6.75 per unit — 61% above the invoice price
Three rules that follow from the math
1. Small orders carry brutal landed costs. The same $600 freight across 100 units adds $6.00 per unit instead of $1.20 — test batches are always your most expensive inventory, so judge product viability on production-run economics, not sample-run economics.
2. Find your real tariff rate. Look up your product's HTS code at hts.usitc.gov, then add any additional tariffs active for your country of origin; your freight forwarder can confirm the effective rate before you order.
3. Feed landed cost downstream. Every profit number on this site — FBA, eBay, pricing targets — is only as honest as the product cost you enter. Enter landed, not invoice.