Landed Cost Calculator
Computes the true total cost of an imported product by adding freight, import duties, insurance, and handling fees to the purchase price. Importers use it to compare suppliers and set accurate resale prices.
About this calculator
Landed cost is the complete cost of a product delivered to your door, including every charge incurred from the point of manufacture. The formula used here is: Landed Cost = Product Cost + Shipping + ((Product Cost + Shipping) × Duty Rate%) + Insurance Fees + Handling Fees. Duties are assessed on the CIF value (Cost + Insurance + Freight) in many countries, so this calculator applies the duty rate to the sum of product and shipping costs as a common approximation. Taxes such as VAT may apply on top of this depending on jurisdiction. Understanding landed cost prevents underpricing: a product costing $10 ex-factory can easily reach $14–$16 once duties and logistics are added. Comparing landed costs across multiple suppliers — even those with different FOB prices — gives a true apples-to-apples procurement comparison.
How to use
A retailer imports a product with a $1,000 product cost and $150 in shipping. The applicable duty rate is 8%, insurance is $20, and documentation fees are $30. Duty base = $1,000 + $150 = $1,150; Duty = $1,150 × 8% = $92. Landed Cost = $1,000 + $150 + $92 + $20 + $30 = $1,292. Even though the product cost only $1,000, the true cost per shipment is $1,292 — 29.2% higher. Divide by unit count to get per-unit landed cost and ensure your pricing covers all these charges before setting a margin.
Frequently asked questions
What is the difference between FOB price and landed cost?
FOB (Free On Board) price is what you pay the supplier up to the point of loading onto the export vessel — it excludes international freight, insurance, import duties, and domestic handling at the destination. Landed cost adds all those downstream charges to give the true cost at your warehouse door. For importers, buying decisions based on FOB price alone can be dangerously misleading: a cheaper FOB supplier from a high-duty country may end up more expensive in total than a pricier supplier from a free-trade-agreement partner country.
How do import duty rates affect landed cost calculations?
Duty rates are set by the destination country's customs authority and vary by product category (HS code) and country of origin. They are typically expressed as a percentage of the customs value, which in many countries is the CIF value (product + shipping + insurance). Even a 5% duty rate can add hundreds of dollars to a large shipment. Trade agreements like USMCA or EU free trade deals can reduce duties to 0%, making the country of origin a key variable in landed cost optimization. Always verify the correct HS code and applicable duty rate with a customs broker before finalizing your calculations.
Why is landed cost important for setting retail prices?
If you price a product using only its purchase cost or FOB price, you risk selling below your true cost and generating negative margins on every unit. Landed cost establishes the true cost floor from which you build up gross margin, operating expenses, and profit. It also enables accurate comparison of domestic versus imported sourcing options on a like-for-like basis. For e-commerce sellers with international supply chains, miscalculating landed cost is one of the most common causes of unexpected losses, particularly when duty rates or freight rates change mid-year.