Landed cost calculator

How are shared costs split across products?

A shipment usually carries several products under one freight, duty, and insurance bill, so those shared costs have to be divided across the SKUs. There are four common methods, and they give different per-unit numbers:

• By value: each product takes a share equal to its share of the total order value. A good default when you do not track weights.
• By weight: split by each product's share of total weight. Most accurate when freight is priced by weight.
• By volume: split by each product's share of total volume (CBM). Best for ocean freight, which is usually priced by space.
• By quantity: split evenly per unit. Simplest, but it overcharges small light items and undercharges big heavy ones.

Duties are different. They are a percentage of each product's own value, so they stay per-product no matter which split you choose.

How Incoterms change your landed cost

Your shipping term, called an Incoterm, decides which costs are already baked into the supplier's price and which ones fall to you. The calculator's Incoterm selector disables whatever your term already covers, so you never double count. Here are the four you will run into most, ordered from the most you pay to the least:

• EXW (Ex Works): the supplier's price covers the factory door and nothing else. You pay origin charges (inland haulage to the port and export clearance), main freight, insurance, duties, and destination handling. You add the most.
• FOB (Free On Board): the most common term for ocean freight. The supplier covers getting the goods loaded onto the vessel, including inland haulage to the origin port and export clearance. You pay main freight, insurance, duties, and destination handling from there.
• CIF (Cost, Insurance, Freight): the supplier's price already includes main freight and insurance to the destination port. You still pay duties and destination handling.
• DDP (Delivered Duty Paid): the supplier delivers everything paid, duties included, so your landed cost is essentially the invoice price.

What counts as landed cost?

Landed cost is the total cost of a product by the time it reaches your door, not just the supplier's price. It adds up everything it takes to get the goods to you:

• Supplier (unit) price: what the factory invoices you per unit.
• Origin charges: inland haulage to the port and export clearance (you pay these on EXW terms).
• Inbound freight: ocean, air, or ground to your door.
• Duties and tariffs: import taxes, usually a percentage of the goods value.
• Insurance, customs, and handling: coverage in transit, brokerage, and the labor to receive it.
• Other fees: inspection, drayage, and payment or currency fees.

For goods shipped by ocean freight, true landed cost commonly runs 20 to 50 percent higher than the supplier price. For the full breakdown, read our guide on what landed cost is and why it decides your profitability.

How to calculate landed cost per unit

1. Gather the supplier price. Start with the supplier (FOB) price for a single unit.
2. Add every shipment-level cost. Total the freight, duties and tariffs, insurance, customs and brokerage, handling, and any other fees for the whole shipment.
3. Allocate the shared costs across units. Split the shipment costs across your products by value, weight, or volume to get the added cost per unit. Heavier or pricier items should carry more.
4. Add it to the supplier price. Add each product's allocated cost to its supplier price. That is your true landed cost per unit, the number you should price and forecast against.