Landed Cost
Landed Cost is the total cost of getting a product to its final destination — the price of the goods plus every cost along the way: freight, insurance, customs duties and taxes, port and handling charges, brokerage, and inland transport. It is what the product actually costs the buyer once it has “landed”, not just the supplier's invoice price.
Landed cost is essential for accurate pricing, margin and sourcing decisions: a lower ex-works price from a distant supplier can end up more expensive once freight and duty are added. Calculating it correctly means capturing all the cost components and allocating them across the goods — which is why it sits at the intersection of procurement, logistics and finance, and why ERP and trade systems put effort into landed-cost calculation.
The supplier's invoice is only part of what a product really costs — freight, duty, insurance and handling can turn a cheap-looking source into an expensive one. Landed cost is the number that reveals true margin and the smartest sourcing choice, which is why getting it right is a finance-and-logistics priority, not just a shipping detail.
What goes into landed cost?
The goods price plus freight, insurance, customs duties and taxes, port and handling charges, brokerage and inland transport.
Why calculate landed cost?
To price products accurately, protect margins, and compare suppliers fairly — a low ex-works price can be expensive once freight and duty are added.