Landed Cost
Landed cost is the total cost of a product once it has arrived at the buyer's door. It includes the purchase price, shipping and freight costs, insurance, customs duties, and any other charges incurred to get the product from the seller to the buyer.
Components of Landed Cost
- Product cost (FOB price)
- Freight and shipping
- Insurance
- Customs duties (general rate + any special tariffs)
- Customs brokerage fees
- Port handling charges
- Domestic transportation
Why It Matters
Understanding landed cost is critical for pricing decisions, supplier negotiations, and determining true profitability. Many importers underestimate their total costs by not accounting for all tariff layers.