Landed Cost & Margin Calculator
Calculate the final price of the product and assess its margin and profitability compared to similar products in the target market
See How the Calculator Works
Watch the short video to learn what information you will need, where to enter it, and how to read your final cost and margin breakdown.
What the Calculator Shows
A supplier quote tells you the price of the goods, but not necessarily what they will cost by the time they reach their destination. Freight, customs duties, taxes, insurance, and handling can change the economics of an order considerably. This makes it easier to check the numbers before committing to a supplier or confirming a shipment.
The calculator estimates:
Landed cost of the full order Landed cost per unit Freight, duties, and applicable taxes Expected profit per unit and per order Gross margin at your expected selling price.
Based on the information you enter
What Is Included in Landed Cost?
Landed cost is the total estimated cost of purchasing a product and getting it to its destination. The exact components depend on the product, route, shipping terms, and destination country.
Not every shipment includes every cost shown above. Some charges may already be included in a supplier or freight quote, while others may need to be added separately.
How Landed Cost Is Calculated
The basic formula is straightforward:
To find the cost of an individual unit:
For example, if importing 1,000 units costs $26,400 in total, the landed cost is $26.40 per unit. Order size and packaging can also affect the result.
Why the Supplier Price Is Not Enough
For example, a supplier may quote $20 per unit
After freight and insurance, the cost rises by $2. Customs duty and taxes add another $2.80, while brokerage and handling add $1.60.
The supplier price is still $20, but the estimated landed cost is now $26.40 per unit
Pricing the product on the original quote would overstate the expected profit by $6.40 on every unit.
This is also why the supplier with the lowest unit price is not always the least expensive option.
A higher product price can sometimes be offset by lower freight costs, more favourable duties, or a more efficient shipping route.
Compare Costs Before You Order
Running the calculation before placing an order can help you compare suppliers on more than price alone. You can test different order quantities, sourcing countries, routes, and transportation methods, then see how each option affects the final unit cost and expected margin.
Landed Cost and Profit Margin
Once you have an estimated landed cost per unit, you can compare it with the price you expect to receive in your market.
If the landed cost is $26.40 and the expected selling price is $40, the estimated profit is $13.60 per unit, giving a gross margin of 34%.
Margin should not be confused with markup. Margin measures profit as a percentage of the selling price, while markup measures it as a percentage of cost.
How Customs Duty Affects the Calculation
Customs duty depends on several factors, including the product’s HS code, declared customs value, country of origin, destination, and applicable tariff rate.
For example, an 8% duty applied to a customs value of $10,000 would add $800 to the import cost
However, similar products can receive different duty rates if they are classified under different HS codes.
Trade agreements, exemptions, additional tariffs, and local tax rules may also affect the final amount. Check the product classification and applicable rules before relying on the calculation for a purchasing decision.
Frequently Asked Questions
Landed cost is the estimated total cost of buying a product, transporting it, and importing it into the destination country. It can include the supplier price, freight, insurance, customs duty, taxes, handling, and other applicable charges.
Product cost is the amount paid to the supplier for the goods. Landed cost also accounts for the expenses involved in transporting and importing them.
Landed cost per unit is the total landed cost of an order divided by the number of units. An order with a total landed cost of $26,400 and a quantity of 1,000 therefore has a landed cost of $26.40 per unit.
Yes, when customs duty applies, it forms part of the landed cost. The rate can depend on the HS code, customs value, origin, destination, and applicable trade rules.
It can. Whether VAT, GST, or another import tax should be included depends on the destination country, the transaction, and how recoverable taxes are treated by the importing business.
Yes. Enter your expected market price to compare it with the estimated landed cost per unit and see the potential profit and gross margin.
No. The results are estimates based on the details entered and the cost information available at the time. Actual import and transportation charges may differ.