Landed cost
Reviewed by Dasha ShakovVP Marketing, Proton
Updated
What is landed cost?
Landed cost is the total cost of getting a product onto the shelf: its purchase price plus inbound freight, duties and tariffs, insurance and handling. Pricing from the purchase price alone overstates the margin on imported or heavy items.
Landed cost example
Hand tools bought at $10 a unit cost $12.40 each by the time ocean freight, duty, customs brokerage and trucking from the port are added, and $12.40 is the figure the pricing team works from.
Related terms
- Cost of goods sold (COGS)Cost of goods sold (COGS) is the cost of the products a company sold during a period.
- Freight termsFreight terms are the part of a sale that says who pays for shipping and how the cost is billed.
- Free on board (FOB)Free on board (FOB) is a shipping term that names the point where responsibility for the goods passes from seller to buyer.
- Replacement costReplacement cost is what it would cost a distributor to buy an item again today, as opposed to what it paid for the stock already on its shelf.
