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Landed Cost Per Unit
Landed cost is the total price of a product once it arrives at your door — including the original purchase price, international shipping, insurance, customs duties, import taxes, and any handling or brokerage fees along the way. For ecommerce sellers sourcing products from overseas suppliers (often via Alibaba, 1688, or manufacturer direct), the landed cost per unit is the true baseline you must beat with your selling price to make a profit. Without calculating landed cost, you risk pricing products too low and losing money on every sale.
The landed cost formula starts with your CIF value (Cost, Insurance, and Freight): the product cost plus international shipping plus cargo insurance. Customs duty is then calculated as a percentage of CIF. Import tax (VAT or GST, depending on your country) is typically applied to CIF + duty. Finally, add local handling charges (port fees, last-mile delivery to your warehouse) and any other fees (customs broker, inspections, storage). Divide the total by the number of units to get your landed cost per unit. This calculator does all of that for you.
A complete landed cost calculation includes seven cost components: (1) the ex-works or FOB product price, (2) international freight (sea, air, or courier), (3) cargo insurance, (4) customs duties based on the HS code and destination country tariff schedule, (5) import taxes such as GST, VAT, or sales tax, (6) local handling including port charges, warehousing, and last-mile delivery, and (7) other fees like customs brokerage, quality inspections, and compliance certificates. Missing even one component leads to underpricing — a common mistake for new importers.
Knowing your landed cost per unit is critical when selling on marketplaces like Shopee, Lazada, Temu, or TikTok Shop, where platform fees eat further into your margin. Your selling price must cover the landed cost plus marketplace fees, payment processing, outbound shipping, and returns. Use our markup calculator to work out the right selling price, and the COGS calculator to track your cost of goods sold over time. Sellers managing inventory across multiple channels benefit from a centralised system that tracks purchase costs, shipping, and duties per SKU automatically.
The biggest mistake is forgetting hidden costs. Customs brokerage fees, port demurrage charges, fumigation certificates, and product labelling requirements all add up. Another common error is applying duty rates to the wrong value — customs duty is calculated on the CIF value (product + shipping + insurance), not just the product cost. Import tax is then calculated on CIF + duty, compounding the cost further. Finally, many sellers forget to factor in currency conversion fees and exchange rate fluctuations, which can add 2-5% to international purchases.
The most effective way to lower landed cost is to increase order quantities — shipping cost per unit drops dramatically as volume grows. Negotiate FOB or CIF terms with your supplier so they handle freight arrangements and share the risk. Choose sea freight over air freight when lead time allows (sea freight is typically 5-10x cheaper per kg). Research the correct HS code to ensure you are not overpaying duty — some product categories qualify for preferential tariff rates under free trade agreements (e.g., AFTA for ASEAN countries, USMCA for North America). Finally, consolidate shipments from multiple suppliers to fill a container and reduce per-unit freight.