Glossary
What is landed cost?
Landed cost is the total cost of getting a product from the supplier to your door: the purchase price plus freight, insurance, customs duty, handling and brokerage charges, and inland delivery. It is the real unit cost a business should price against. |
What goes into landed cost?
- Unit price from the supplier
- Freight and insurance to the border
- Customs duty, driven by commodity code and origin
- Import VAT usually recoverable for VAT-registered UK importers, so often excluded from margin maths
- Port, terminal and handling charges, plus customs brokerage
- Inland haulage and storage to final destination
Why it decides your margin
Duty alone can move unit cost by several percentage points depending on how a product is classified and where it originates, and a valid preference claim can remove it entirely. Businesses that price off supplier cost alone routinely find the true figure is materially higher once the goods actually land.
Landed cost is not customs value
Customs value is the basis for calculating duty normally the transaction value plus freight and insurance to the point of entry. Landed cost is a commercial figure that also includes the duty itself and everything after the border. Treating them as the same number double-counts.
iCalculator works out duty, VAT and total landed cost from your commodity code and origin before you commit to an order. |
