Direct answer: Landed cost is the total per-unit cost of getting a product to your warehouse ready to sell. It combines FOB product cost, freight, insurance, duty, packaging, payment fees, and inbound warehouse charges.
This guide walks through the exact formula US importers use and includes a free browser-based landed cost calculator.
Who this is for
US-based Shopify, Amazon, and Walmart Marketplace sellers importing product from overseas suppliers who need a per-unit cost figure that supports pricing and margin decisions.
The landed cost formula
Landed cost per unit = Product cost + Duty on product cost + (Freight + Insurance + Warehouse fees) ÷ Units + Packaging per unit + Payment fee allocation per unit.
Getting duty right
Duty depends on the Harmonized Tariff Schedule (HTS) code for the product. Rates vary from 0% to 25%+ and can change with US trade policy. Confirm the HTS code with a licensed customs broker before pricing at scale.
Allocating freight and insurance
If a shipment mixes SKUs, allocate freight by chargeable weight or volume rather than by unit count — otherwise light, bulky SKUs will look artificially cheap.
Illustrative landed cost table
| Component | Per unit |
|---|---|
| Product cost (FOB) | $6.00 |
| Duty @ 7.5% | $0.45 |
| Freight (allocated) | $1.60 |
| Insurance (allocated) | $0.08 |
| Packaging | $0.40 |
| Warehouse inbound | $0.25 |
| Payment fee | $0.09 |
| Landed cost | $8.87 |
Example calculation (USD)
An importer buys 500 units at $6 FOB. Freight is $800, insurance $40, duty 7.5%, packaging $0.40, warehouse $0.25, wire fee $45. Freight/unit = $1.60, insurance/unit = $0.08, duty/unit = $0.45, wire/unit = $0.09. Landed cost = $6 + $0.45 + $1.60 + $0.08 + $0.40 + $0.25 + $0.09 = $8.87 per unit — a 47.8% uplift over FOB.
Common mistakes to avoid
- Using FOB as your COGS in pricing — this overstates margin.
- Forgetting duty entirely on samples or replacement stock.
- Ignoring FX conversion fees on international payments.
- Not re-running the calculation after carrier or tariff changes.
Best practices
- Recalculate for every shipment, not just quarterly.
- Ask suppliers to break out packaging costs separately.
- Keep a spreadsheet history so you can spot creeping cost inflation.
Frequently asked questions
Does landed cost include marketing?
No — only the cost to get inventory into your warehouse ready to sell.
How often should I recalculate?
Every shipment, and any time freight, tariffs, or FX move materially.
Do FBA fees belong in landed cost?
Amazon-specific inbound shipping to FBA does. Storage and fulfillment fees are separate.