A landed cost calculator totals the expense of getting imported products to your warehouse, then divides it by sellable units. That gives you a delivered unit cost you can use for pricing.
Your supplier’s quote leaves out expenses that can erase a product’s profitability. Start with the shipment inputs, then separate inventory costs from the expenses of selling each order.
Use a landed cost calculator in five steps
A spreadsheet works if it separates shipment totals, per-unit amounts, percentage charges, and tax bases. Enter everything in one reporting currency, while retaining the exchange rate and original invoice amounts.
- Enter the product quantity and supplier invoice value, including applicable packaging or production charges.
- Select the origin, destination, shipping method, and agreed shipping terms.
- Add international transport, cargo cover, broker fees, port charges, and delivery to your receiving location.
- Enter the base duty rate, additional tariffs, import taxes, and any product-specific levies separately.
- Divide the shipment total by sellable units, then pass that unit cost into your pricing calculation.
Record whether each amount is quoted, estimated, or invoiced. Also retain the shipment date because tariffs, exchange rates, and transport charges change.
Keep unrounded values in the worksheet. Round the displayed unit cost only after calculating the total.
What belongs in the landed cost formula
Add every cost through arrival
Total landed cost = product cost + shipping + coverage + customs duties and tariffs + import taxes + brokerage, handling, and delivery fees.
Include applicable excise, inspection fees, customs bonds, terminal charges, and other levies. Bank transfer charges or currency-conversion costs also belong in your purchasing model when they relate to the shipment.
Shipping costs, duties, tariffs, and customs fees can add 50% to 70% to the supplier price. Treat that as a possible outcome, not a default allowance.
Divide by inventory you can sell
Landed cost per unit = total landed cost / sellable units received.
Damaged goods and unsellable samples reduce the denominator. Consequently, dividing by the quantity ordered can understate your usable inventory cost.
Draw a clear boundary at warehouse arrival. Outbound postage, pick-and-pack charges, payment fees, and customer returns belong in the selling-cost model. Our fulfillment cost per order calculator covers those operational expenses.
If receiving appears in both models, assign it once. Bundled charges need the same discipline.
Find the duty rate and destination tax base
Use national tariff codes, not six digits alone
Start with the product’s HS code. Destinations extend the internationally harmonized six-digit HS code into national tariff codes, commonly eight to ten digits, and assign their own rates.
For US imports, the USITC Harmonized Tariff Schedule provides the full national classification, known as the HTS code, and tariff rates. A customs broker can resolve uncertain classifications using the product’s materials, function, and specifications.
Enter the base import duty at its duty rate, then list additional tariffs separately. Country of origin, trade preferences, and special measures can change the result. An AI classification suggestion doesn’t establish the legal classification.
Calculate duty and import tax separately
CIF = goods value + international transport charges + cargo cover.
A CIF-style value is the customs starting point in many countries, but it isn’t universal. US customs value generally excludes separately identified international freight and insurance, while required valuation additions can increase the goods value.
These common treatments show why destination settings matter.
| Destination | Typical duty base | Import consumption tax |
|---|---|---|
| United States | Goods transaction value, with required adjustments | No federal import VAT or GST |
| United Kingdom | Generally includes freight and cargo cover to the border | Standard VAT is 20%; the base includes duty and applicable incidental costs |
| Australia | Customs value generally excludes international freight and insurance | GST is generally 10% on customs value, duty, and international transport and insurance |
Import consumption tax or GST equals the tax rate multiplied by the destination’s prescribed base.
Brokerage and trucking aren’t universally excluded. Under HMRC’s import tax valuation rules, incidental costs through the first destination can enter the tax base.
Model EXW, FOB, CIF, and DDP quotes correctly
Shipping terms determine which expenses the supplier’s price already covers. The International Trade Administration’s Incoterms responsibility guide explains how the rules divide buyer and seller obligations.
Use the agreed named place or port alongside the term.
| Term | What the buyer’s calculation needs |
|---|---|
| EXW | Collection, export arrangements, freight, insurance, import clearance, and delivery |
| FOB | Main freight, insurance, and destination costs after delivery aboard the vessel |
| CIF | Destination clearance, duties, taxes, and onward costs not already covered |
| DDP | Any exclusions in the quote and costs beyond the named delivery point |
FOB and CIF apply to sea and inland-waterway transport. Also, CIF includes seller-paid transportation and cargo cover, but risk transfers when goods are aboard at origin.
For DDP, keep included duties visible without adding them again. Otherwise, a seemingly complete quote can produce a double-counted total.
Work through a 1,000-unit import calculation
Calculate a US ocean shipment of 1,000 sellable units at $3.20 each. Use 5% base duty and 15% additional tariffs as calculation inputs, not as rates for a particular product.
For formal entries, MPF is 0.3464%, subject to the fiscal year 2027 minimum of $34.58 and maximum of $670.86. Those limits apply from October 1, 2026. CBP publishes the customs user fee schedule; dollar limits can change annually.
HMF is 0.125% for covered ocean cargo at qualifying ports, subject to exemptions. It doesn’t apply to an air shipment.
Here is the complete shipment calculation.
| Cost line | Calculation | Amount |
|---|---|---|
| Products | 1,000 x $3.20 | $3,200.00 |
| International freight | Shipment charge | $950.00 |
| Insurance | Shipment charge | $32.00 |
| Base duty | $3,200 x 5% | $160.00 |
| Additional tariffs | $3,200 x 15% | $480.00 |
| MPF | Minimum applies | $34.58 |
| HMF | $3,200 x 0.125% | $4.00 |
| Brokerage | Shipment charge | $150.00 |
| Port handling | Shipment charge | $100.00 |
| Warehouse delivery | Shipment charge | $200.00 |
| Total landed cost | Sum of charges | $5,310.58 |
No import VAT, excise, or other levy is included in this US calculation.
CIF is $4,182, while the assumed US duty base remains $3,200. Dividing $5,310.58 by 1,000 gives $5.31 per unit, rounded. That’s about 66% above the supplier price.
Turn landed cost into a profitable selling price
Calculate the margin after selling costs
Profit per unit = net selling price – landed cost per unit – selling cost per unit.
Margin = profit per unit / net selling price.
Use revenue after discounts and refunds, excluding sales tax collected for remittance. Selling costs include applicable fulfillment, payment processing, marketplace commissions, and acquisition spending.
At a $12 net selling price and $4 selling cost, the shipment above leaves approximately $2.69 per unit. The profit margin is 22.4% before fixed overhead.
Our ecommerce contribution margin calculator connects these variable expenses without confusing contribution with fully loaded accounting profit.
Solve for break-even and target margin
When selling costs are fixed dollar amounts per unit:
Break-even price = landed unit cost + selling cost per unit.
The example breaks even at approximately $9.31 before fixed overhead. For a 30% target margin, divide that cost by 0.70, producing approximately $13.30.
Percentage-based selling fees require another step. Subtract their rate from the denominator too:
Target price = dollar costs per unit / (1 – percentage fee rate – target margin).
Keep expected returns in the model. A product can cover import costs yet lose money after customer acquisition or reshipments.
Compare suppliers and shipping options side by side
Set up as many as four sourcing options in adjacent spreadsheet columns. Compare equivalent quantities, specifications, receiving locations, and delivery requirements.
A higher supplier price can win when lower tariffs and shorter shipping routes reduce the delivered cost. Compare air and ocean options separately because speed, minimum charges, and inventory availability affect the decision.
For mixed-product shipments, allocate freight by its actual driver, such as chargeable weight or volume. Apply duties by SKU classification and origin, rather than spreading them evenly.
The LED desk lamp Tariff Ladder example illustrates the risk: adding 50 tariff percentage points reduces the percentage return from 16.4% to 4.5%. That result depends on its inputs; it isn’t a universal tariff effect.
A 50-percentage-point increase adds half the applicable customs value to duty before any related tax-base effects.
Key takeaways
Calculate shipment costs before dividing by sellable units. Keep base duty, additional tariffs, and import taxes separate because they can use different bases.
Compare suppliers on the same delivered-cost basis. Then add selling expenses without counting freight, receiving, or bundled services twice.
Frequently asked questions
Should recoverable import VAT count as landed cost?
Track it in the import cash requirement. However, recoverable VAT generally shouldn’t remain in the economic inventory cost used for margin decisions. Nonrecoverable tax remains a cost.
Keep those views separate so a tax recovery doesn’t conceal the cash needed to receive stock.
How do quantity-based duties fit the calculator?
Some duties and excise use weight, volume, or item count rather than a percentage. Enter the prescribed charge multiplied by the relevant quantity. Compound duties can require both calculations.
Use the tariff’s measurement unit, which may differ from your sellable unit.
Base pricing on the delivered unit cost
A useful landed cost calculator connects the supplier invoice to sellable inventory cost. Destination rules and shipping terms determine which charges enter that total.
Carry the result into your margin calculation without duplicating expenses. That gives you a sound basis for comparing quotes and setting prices before committing cash to inventory.
