What Is Landed Cost? A Complete Guide for Ecommerce Sellers
Learn what landed cost means, why it matters for your ecommerce business, and how to calculate it accurately to avoid margin surprises.
Quick Answer
Landed cost is your total per-unit cost after adding product cost, shipping, insurance, duties, customs fees, and brokerage. For a typical $25 product imported from China, expect a landed cost of $30-$38 per unit.
Why It Matters
Without accurate landed cost, sellers routinely underprice products. A product that looks profitable at the supplier price may be a money-loser after freight, duty, and fees. Understanding landed cost helps you set profitable prices and compare suppliers fairly.
Formula / Framework
Example Scenario
100 wooden chairs from China at $25/unit via ocean freight.
| Item | Amount |
|---|---|
| Product Cost (100 x $25) | $2,500.00 |
| Ocean Freight + Insurance | $215.00 |
| Duty at 8% | $217.20 |
| Customs + Brokerage | $80.00 |
| Total Landed Cost | $3,012.20 |
| Per-unit Landed | $30.12 |
| 50% margin price | $60.24 |
Cost Components
| Component | Typical Range | Notes |
|---|---|---|
| Product Cost | $5-$200/unit | Supplier invoice price. Negotiate FOB terms. |
| Freight | $0.50-$5/unit | Ocean cheapest per unit; air fastest. Get multiple quotes. |
| Insurance | 0.3-0.5% of value | Often optional for ocean; mandatory for high-value cargo. |
| Import Duty | 0-25% | Depends on HS code. Check HTS before ordering. |
| Customs + Brokerage | $50-$200/shipment | Fixed fee per entry. Can be bundled. |
| Inland Freight | $50-$300/shipment | Port to warehouse. Often overlooked. |
Common Mistakes
- Forgetting customs clearance and brokerage fees
- Using product cost instead of customs value to calculate duty
- Not accounting for currency fluctuations
- Dividing by the wrong quantity
Seller Checklist
- Get FOB quotes from 3+ suppliers
- Request ocean and air freight quotes
- Look up correct HS code and duty rate
- Add 15-20% buffer for unexpected costs
- Calculate selling price at 40%, 50%, 60% margins
Ready to calculate your costs?
Try Landed Cost Calculator →Official Source Note
Duty rates from USITC HTS (hts.usitc.gov). Shipping estimates based on carrier rates. Verify with broker.
Frequently Asked Questions
Difference between FOB and landed cost?
FOB covers product + delivery to export port. Landed cost adds freight, insurance, duties, and destination fees.
How much buffer should I add?
Add 15-20% for first shipments. Narrow as you gain experience with the product and route.
Does landed cost include Amazon FBA fees?
No. Landed cost ends at your warehouse. FBA fees, marketplace commissions, and ads are additional.
Last reviewed: 2026-07-01