What is landed cost?
Landed cost is the total cost of bringing goods to where they will be used or sold. It provides a better comparison than supplier unit price alone.
Landed cost = goods + freight + insurance + customs + fees
What should be included?
Include goods, packaging, freight, insurance, customs, forwarding, terminal and administration fees, plus other direct delivery costs.
Example
100 units cost 10,000. Add freight of 1,000, insurance of 100, customs and administration of 250, then divide the total by 100 for true unit cost.
Customs, VAT and comparison
Customs rules depend on product and origin. Recoverable import VAT is normally excluded. Use the same currency, delivery point and cost scope for every quotation.
Calculate your own scenario
Use the free PurchaseKPI calculator and get the result immediately.
Landed cost calculator