Landed cost
What one unit really costs once the item price, freight, duties, brokerage, insurance, and inbound handling are included.
See it
What it is
Landed cost is what inventory costs by the time it reaches the place where you can sell it. Start with the supplier invoice, then allocate freight, insurance, customs duty, brokerage, port charges, and inbound handling across the units. That all-in unit number, not the factory quote, is the useful floor under your margin.
Calculate it before setting retail prices, comparing suppliers, or choosing between air and sea freight. The shipping term matters: under ICC Incoterms 2020, EXW leaves far more transport work with the buyer than DDP, so two identical unit quotes can land very differently.
Gotcha: allocation can distort the answer. Dividing every charge by unit count makes a silk scarf absorb as much freight as a cast-iron pan. Allocate each charge by the driver that caused it, such as value for insurance and duty, weight or volume for freight, and units for a flat handling charge.
Ask AI for it
Build a landed-cost calculator for purchase orders using ICC Incoterms 2020. Accept line-item quantity, supplier unit price, HS-code duty rate, weight, volume, and declared value, plus shipment-level freight, insurance, brokerage, and handling charges. Allocate freight by chargeable weight, insurance and duty by declared value, and flat handling by unit count. Show each allocation rule and amount, then calculate landed cost per unit and expected gross margin at the planned retail price. Store money as integer minor units, preserve the shipment currency and exchange-rate timestamp, and assign rounding residue to the largest allocation so line totals reconcile exactly.