Landed Cost Calculator
Work out what each unit really costs once it reaches your warehouse. Enter the lines on your purchase order, the freight, insurance and fees for the shipment and the duty rate for each product, then allocate by value, weight or units.
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Questions
- What is landed cost?
- Landed cost is the total cost of getting a product to your warehouse: the supplier price plus freight, insurance, customs duty, brokerage and other import fees. It is the right cost for margins, pricing and inventory value, because the supplier price alone understates what each unit cost you.
- Should I allocate freight by value, weight or units?
- Weight reflects what usually drives freight cost, so it suits shipments that mix heavy and light items. Value suits insurance and fees charged as a percentage of value. Units is the simplest and works when the items are similar. Pick one method and use it consistently.
- Is duty charged on the freight too?
- It depends on where you import. The United States generally values imports without international freight and insurance (close to FOB), while the EU, the UK and many other countries add freight and insurance up to the border (CIF). Choose the basis that matches your destination and confirm with your customs broker.
- Where do I find the duty rate?
- Duty depends on the product's tariff classification (its HS code), its country of origin and any trade agreements or extra tariffs that apply. Your customs broker or the official tariff schedule (for example the US Harmonized Tariff Schedule, the EU TARIC database or the UK Trade Tariff) is the reliable source. Enter the total rate for each line.
- Is import VAT part of landed cost?
- For a VAT registered business that can reclaim import VAT, it is usually a cash flow cost rather than a product cost, so it is left out here. If you cannot reclaim it, add it to the shipment fees.
- How do I use landed cost for profit?
- Use the landed cost per unit as the product cost in the profit and margin calculators. In Invechar, freight, duty and fees entered on a purchase order roll into the FIFO cost of the units when they are received, so every order line carries its true cost.