Landed cost — what an imported shipment actually costs by the time it reaches your warehouse — is almost never just the product price a supplier quotes you. For most first-time buyers, freight, duty, taxes, and handling fees add roughly 15–40% on top of the product cost, depending on category, shipping method, and destination country. Anyone budgeting off the supplier's quote alone is budgeting off an incomplete number.
Start with the product cost, then add freight (get an actual quote, not an estimate — rates vary too much by route and season to guess), then apply your destination country's duty rate for the correct HS code, then add your local tax on the duty-inclusive value, then add a rough 3–5% for broker fees and last-mile delivery. This won't be exact, but it will be close enough to avoid the two most common first-order mistakes: underpricing a product launch, or discovering the real cost only after goods are already in transit.
The single most common error is treating the FOB or EXW quote as the landed cost. It isn't — it's the starting point. The second most common error is guessing at the duty rate instead of looking up the actual HS code classification, which can differ meaningfully even between similar products in the same general category. The third is forgetting that tax is usually calculated on top of duty, not on the product price alone, which compounds the gap between the quote and the real number.
A sourcing partner who handles landed cost calculations as a standard part of quoting — not an afterthought once you ask — is worth the relationship on this alone. Getting this number wrong doesn't just hurt margin on one order; it can make an entire product line look viable on paper when it isn't.
Say a product costs $10,000 FOB for a full container. Ocean freight on the route runs $2,500. Insurance at 0.4% of cargo value adds $40. If the destination country's duty rate for that HS code is 8%, duty comes to roughly $1,000 on the CIF value (product plus freight plus insurance, or roughly $12,540). Local tax at 15% on the duty-inclusive value adds another $2,031. Broker fees and last-mile delivery might run another $400–600. The total landed cost lands around $16,000–16,200 against a $10,000 product quote — roughly 60% above the headline price in this example, which is why category and duty rate matter so much to the real percentage, not a fixed rule of thumb.
The exact numbers shift by product, route, and destination, but the structure of the calculation doesn't. Running this math before committing to a price point, not after goods have shipped, is what separates a margin that holds up from one that quietly disappears.
Who pays for what and who bears risk at each stage of a shipment, in plain language.
Trade Terms & ComplianceWhy duty depends on HS code and trade agreements, not simply which country goods came from.
Sea Freight & LogisticsHow order volume, cost per unit, and transit time should decide which container shipping method you use.
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