beginners8 min readUpdated 2026-07-01

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

Landed Cost per Unit = (Product Cost x Quantity + Shipping + Insurance + Duty + Customs Fee + Brokerage) / Quantity. Duty = (Product Cost x Quantity + Shipping + Insurance) x Duty Rate %.

Example Scenario

100 wooden chairs from China at $25/unit via ocean freight.

ItemAmount
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

ComponentTypical RangeNotes
Product Cost$5-$200/unitSupplier invoice price. Negotiate FOB terms.
Freight$0.50-$5/unitOcean cheapest per unit; air fastest. Get multiple quotes.
Insurance0.3-0.5% of valueOften optional for ocean; mandatory for high-value cargo.
Import Duty0-25%Depends on HS code. Check HTS before ordering.
Customs + Brokerage$50-$200/shipmentFixed fee per entry. Can be bundled.
Inland Freight$50-$300/shipmentPort 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

  1. Get FOB quotes from 3+ suppliers
  2. Request ocean and air freight quotes
  3. Look up correct HS code and duty rate
  4. Add 15-20% buffer for unexpected costs
  5. 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

Important Disclaimer: All calculators, guides, and estimates are for informational and planning purposes only. Import duties, tariffs, customs fees, HS classifications, and shipping costs may vary by country, product, customs authority, broker, carrier, and policy changes. Always confirm with a licensed customs broker, tax advisor, or relevant authority before making business decisions.

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