What is landed cost?
Landed cost is the full cost of a product once it has “landed” where you will sell it. It starts with the supplier’s price and adds every cost of moving, insuring, clearing and handling the goods until they are in your warehouse and ready to ship to customers. Comparing suppliers or markets on the supplier price alone hides most of these costs.
Core principle: Compare products, suppliers and markets on landed cost per unit, not on the factory price.
What landed cost includes
Product cost
The price paid to the supplier, including packaging and any tooling or sample costs spread across units.
Freight and insurance
Sea, air, rail or road freight from origin to your warehouse, plus cargo insurance. Who pays which part depends on the agreed Incoterms.
Customs duty
Calculated on the customs value of the goods, using the duty rate for their HS code and origin. Preferential origin can lower it, see rules of origin.
Import VAT and other taxes
Charged on the goods plus duty and freight. VAT-registered businesses can usually reclaim import VAT, so it affects cash flow more than final cost.
Watch out for: Excise duties apply to goods such as alcohol and tobacco.
Clearance and handling
Customs broker fees, port and terminal charges, delivery to the warehouse, unloading and receiving.
How to calculate landed cost
Landed cost per unit = (product cost + freight + insurance + duty + non-reclaimable taxes + clearance and handling) ÷ number of units.
Example: A brand imports 2,000 units from China at €5.00 each (€10,000). Sea freight and insurance cost €1,200, customs duty at an assumed 6% of the customs value (goods plus freight and insurance to the EU border) is €672, and clearance, port charges and delivery to the warehouse cost €450. Landed cost = €12,322, or about €6.16 per unit, 23% more than the supplier price. Import VAT is paid too but reclaimed through the VAT return.
Bulk import vs direct parcels
| Bulk import to an EU warehouse | Direct parcels from outside the EU | |
|---|---|---|
| Customs | One clearance per shipment | Every parcel is an import |
| Duty | Normal rate for the goods | Flat €3 per item on parcels up to €150 (from 1 July 2026) |
| Freight cost per unit | Low (pallets or containers) | High (international parcel rates) |
| Delivery to customers | Domestic, usually 1–3 days | Cross-border, slower |
See de minimis threshold for the low-value parcel rules, and our guide to logistics costs for the costs after the goods land.
Common pitfalls
- Leaving out duty or using the wrong HS code.
- Forgetting port, broker and inland delivery charges.
- Ignoring currency movements between order and payment.
- Comparing a landed price from one supplier with an ex-works price from another.
Waredock receives bulk imports, handles customs clearance and stores your stock in Europe, see fulfilment for non-EU brands.
Frequently asked questions
What is included in landed cost?
The product price, freight, insurance, customs duty, non-reclaimable taxes, customs clearance, port charges and handling until the goods are in your warehouse.
Is VAT part of landed cost?
Import VAT is paid on import, but VAT-registered businesses can usually reclaim it, so it is often left out of the final cost per unit and treated as a cash flow item.
How do you calculate landed cost per unit?
Add the product cost and all freight, insurance, duty, tax and handling costs for a shipment, then divide by the number of units.
Why does landed cost matter for eCommerce brands?
It shows the real cost of a product before you set prices or compare suppliers and markets, so you do not lose margin to costs you did not plan for.
