Landed Cost & Import Duty Calculator

The invoice from your supplier says $4.00 a unit. That number is not your cost, and pricing against it is how importers end up with healthy-looking spreadsheets and empty bank accounts.

Landed cost is what a unit actually costs once it is sitting in your warehouse ready to sell — goods, freight, duty, insurance, and clearance included. For a typical China-to-US shipment, landed cost commonly runs 50–90% above the supplier price.

What goes into landed cost

Five components:

1. Product cost — the supplier invoice. Usually the smallest surprise.

2. Freight — ocean or air, plus origin charges, destination charges, and drayage. Ocean is cheaper per unit but slower and adds port fees; air is 4–6× the cost and lands in days.

3. Customs duty — a percentage set by your product's classification code (HTS in the US, commodity code in the UK/EU). Rates commonly run 0–25%, and are higher on textiles, footwear, and some consumer goods.

4. Insurance — typically 0.3–0.5% of cargo value. Optional in theory; skipping it on a $40,000 container is a bet most importers should not take.

5. Brokerage and clearance — customs broker fees, entry fees, port handling, bond costs. Often $100–300 per shipment regardless of size, which makes small shipments disproportionately expensive.

The formula

Landed cost per unit = (Goods + Freight + Insurance + Duty + Brokerage) ÷ Units

The subtlety is in the duty, because duty is charged on a customs value that may or may not include your freight.

CIF vs FOB: the detail that changes your duty bill

FOB (Free On Board) — duty is assessed on the goods value only.

CIF (Cost, Insurance, Freight) — duty is assessed on goods + freight + insurance.

This matters more than most importers expect. On a shipment of 500 units at $4 with $900 freight and $100 insurance:

Basis	Dutiable value	Duty at 7.5%
FOB	$2,000	$150.00
CIF	$3,000	$225.00

A $75 difference on one small shipment, and it scales linearly with volume. The US assesses duty on the FOB value for most imports; the EU and UK use CIF. Many other countries use CIF. Getting this wrong understates your cost on every European import.

The Landed Cost Calculator supports both bases so you can model your actual regime.

A full worked example

500 units of a product, imported to the US:

Component	Amount
Goods (500 × $4.00)	$2,000.00
Ocean freight (door to door)	$900.00
Insurance	$100.00
Dutiable value (CIF basis)	$3,000.00
Import duty at 7.5%	$225.00
Brokerage & clearance	$150.00
Total shipment cost	$3,375.00
Landed cost per unit	$6.75

The supplier said $4.00. The real number is $6.75 — 68.75% higher. Every margin calculation, ad budget, and discount decision based on $4.00 was wrong by two-thirds.

At a $24.99 selling price, gross margin is 73% on landed cost, versus a fictional 84% on supplier cost. That 11-point gap is exactly the size of the error that makes an importer think a losing product is a winner.

Why per-shipment fixed costs punish small orders

Brokerage, entry fees, and much of the origin charge structure are per shipment, not per unit. The same $150 clearance cost spread across different order sizes:

Units	Freight + fixed costs per unit	Landed cost per unit
100	$10.50	$15.05
250	$4.60	$9.11
500	$2.30	$6.75
1,000	$1.35	$5.60
2,000	$0.98	$5.13

Going from 100 to 1,000 units cuts landed cost by 63%. This is the real reason experienced importers order in larger quantities — not supplier discounts, which are usually modest, but the amortization of fixed shipment costs.

It is also the trap: larger orders tie up cash and add risk if the product does not sell. The right order size balances landed cost against inventory risk, and the calculator makes that trade-off visible by letting you model both scenarios.

Getting your duty rate right

Duty is set by your product's classification code, and misclassification is the most expensive mistake in importing — it can trigger back-duty assessments, penalties, and shipment holds.

In the US: look up your HTS code in the USITC Harmonized Tariff Schedule. Codes are 10 digits; the rate depends on the last digits and the country of origin.

In the UK/EU: use the commodity code lookup on your government's trade tariff site.

Two complications worth knowing:

Trade remedies. Section 301 tariffs on Chinese goods add 7.5–25% on top of the normal rate for many categories. Anti-dumping duties on specific products can run far higher. Always check whether additional duties apply to your code and origin country — the base rate is not the whole story.

Country of origin. Duty is based on where the goods were substantially transformed, not where they shipped from. Goods assembled in Vietnam from Chinese components may or may not qualify for Vietnamese rates depending on the transformation.

When the amounts are meaningful, a customs broker's classification opinion costs far less than a reclassification penalty.

De minimis and small shipments

Most countries exempt low-value shipments from duty. The US de minimis threshold has historically been $800 per person per day, though this area has seen active policy change — verify the current rule before building a business model on it.

Deliberately splitting one commercial shipment into many small parcels to stay under a threshold is illegal in most jurisdictions and treated as duty evasion. Some sellers do it; it is not a strategy, it is a liability.

Currency, payment terms, and other real costs

Two costs sit outside the standard landed cost formula but hit the same P&L:

Currency conversion. Paying a supplier in USD from a non-USD account costs 2–4% through a bank, under 1% through a service like Wise. On a $2,000 order that is $40–80 — small per shipment, meaningful annually. Compare options with the Wise vs PayPal vs Payoneer Calculator.

Payment terms. A 30% deposit and 70% on shipment means cash is out the door 60–90 days before revenue arrives. That financing cost is real even if it never appears as a line item.

Storage. For FBA sellers, Amazon's storage fees begin the moment inventory arrives and rise sharply in Q4 and for aged inventory. Slow-moving stock keeps accruing cost after landing.

Using landed cost properly

Price from landed cost, never supplier cost. This is the whole point. Feed the landed figure into the Profit Margin Calculator or Amazon FBA Profit Calculator — never the supplier invoice.

Recalculate when freight moves. Ocean freight rates have swung several hundred percent within single years. A landed cost calculated in a cheap freight market is fiction in an expensive one.

Compute per SKU, not per shipment. A mixed container needs freight allocated by volume or weight, not split evenly. Heavy, bulky items carry more freight cost and their real margin is lower than an even split suggests.

Include it in your ad math. Your breakeven ROAS depends on contribution margin, which depends on landed cost. Using supplier cost here makes every campaign look more profitable than it is.

Keep a landed cost per SKU record. Update it each shipment. Costs drift, and a number from 18 months ago is a guess.

Common mistakes

Using supplier cost for pricing. The error this guide exists to prevent.

Forgetting the fixed per-shipment costs when comparing order quantities — the reason small test orders look artificially unprofitable.

Assuming the base duty rate applies without checking Section 301 or anti-dumping additions.

Splitting freight evenly across mixed SKUs, which systematically overstates margin on heavy items and understates it on light ones.

Never revisiting the number. Freight, duty policy, and supplier prices all move. Recalculate every shipment.

Related calculators

• Amazon FBA Profit Calculator — feed landed cost in to get real FBA margin
• Profit Margin Calculator — margin and markup from your true cost
• Breakeven ROAS Calculator — the ad math that depends on this number
• Break-Even Calculator — units needed to cover your fixed costs