Landed Cost Formula: Calculate the Real Cost of an Imported Product
Landed cost is the true, all-in cost of getting a product to your door — not just the supplier price. This guide lists every component, gives a reusable formula, and works a full example from supplier price through total and per-unit landed cost to gross margin.
Reviewed by Onno C. P. Boots, publisher of UtilityPilot · Last reviewed: 4 September 2026
What goes into landed cost
- Supplier purchase price — what you pay for the goods.
- International freight — sea, air or road transport to the destination.
- Insurance — cover for the goods in transit.
- Customs value — the basis for duty (see the customs value guide).
- Import duty — the tariff on the customs value.
- Additional tariffs — trade-remedy measures where they apply.
- Import VAT/GST — recoverable in some cases, but still a cash cost.
- Customs brokerage — clearance and documentation fees.
- Port and handling charges — terminal, unloading and related fees.
- Inland delivery — transport from the port to your warehouse.
- Other genuine import costs — bank fees, inspection and similar.
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The reusable formula
Total landed cost =
supplier price + freight + insurance + duty + additional tariffs + import tax + brokerage + port & handling + inland delivery + other import costs
Landed cost per unit =
total landed cost ÷ number of units
Gross margin =
(selling price per unit − landed cost per unit) ÷ selling price per unit
Worked example (supplier price to margin)
Figures and rates below are illustrative assumptions, not current official rates.
| Supplier price (1,000 units) | 10,000 |
| International freight | 1,200 |
| Insurance | 100 |
| Import duty (assumed 5% of 11,300 customs value) | 565 |
| Import tax (assumed 10% of duty-inclusive base) | 1,186 |
| Customs brokerage | 150 |
| Port & handling | 200 |
| Inland delivery | 300 |
| Total landed cost | 13,901 |
| Landed cost per unit (÷ 1,000) | 13.90 |
| Assumed selling price per unit | 24.90 |
| Gross margin per unit | ~44% |
Selling at a price that only covers the supplier price would have looked profitable but ignored more than 3,900 in freight, duty, tax and handling — which is exactly what landed cost exists to reveal.
Value, duty, tax, cost and margin
- Customs value — the basis duty is charged on.
- Duty — the tariff charge on that value.
- Tax — import VAT/GST, charged separately on a duty-inclusive base.
- Landed cost — every cost to get the goods to your door.
- Selling price — what you charge your customer.
- Gross margin — the gap between selling price and landed cost, as a percentage.
Common mistakes
- Pricing off the supplier invoice and forgetting freight, duty and tax.
- Leaving brokerage, port and inland delivery out of the per-unit cost.
- Treating recoverable import VAT as if it were never a cash cost.
- Dividing by the wrong unit count, distorting per-unit cost and margin.
What UtilityPilot can calculate
The landed-cost workflow adds these components for you and produces a total and a per-unit figure. Pair it with the freight tools to estimate the transport inputs first.
What you must verify
Duty rates, import-tax treatment and customs value rules depend on your classification, origin and destination. Verify them with the official authority. UtilityPilot does not issue binding decisions or supply live official rates.
Official sources
UtilityPilot summarises these authorities in its own words. Always verify duty rates and classifications directly with the relevant authority before filing a customs entry.
- U.S. Customs and Border Protection — Entry procedures, valuation, additional duties and rulings guidance. (United States)
- European Commission TARIC — EU integrated tariff: duty rates, measures and trade-defence duties by CN code. (European Union)
- UK Trade Tariff — UK commodity codes, duty rates, VAT and preferential rates. (United Kingdom)
Source registry last updated: 4 September 2026
UtilityPilot helps you organise and estimate import costs. It does not issue binding customs classifications and does not supply live official tariff rates. Verify the final classification and duty rate with the official authority or a licensed customs broker.