Landed Cost Calculator: The Formula, the Five Components, and a China-to-USA Example

By SaveOnShip Editorial Team — Logistics Data Editorial Team. Last updated: 2026-08-26.

Quick answer: Landed cost is the total all-in cost of a product once it reaches your door: the product price plus international freight, customs duty, insurance, and fees, divided by the number of units. The core formula is Landed cost per unit = (Product + Freight + Duty + Insurance + Fees) ÷ Units. It is the number that decides whether a product is actually profitable, because the supplier's FOB price is only one component. All price bands, duty rates, and freight figures in this guide are approximate reference bands, not live quotes; shipment-specific pricing and duty require manual confirmation with the provider or a customs broker.

TL;DR: Landed cost is what a product really costs after you add freight, duty, insurance, and fees to the supplier's price. The formula has five components: product, freight, customs duty, insurance, and fees. Add them, divide by units, and you get the landed cost per unit — the true basis for pricing and margin. Most first-time importers underestimate it by 20–40% because they budget on the FOB price and forget the rest. Calculate landed cost before you commit, not after the invoice arrives.

You searched for a landed cost calculator because you have a supplier's unit price and need to know the real number: what will one unit actually cost me by the time it clears US customs and reaches my warehouse? Maybe a product that looked profitable lost money once freight and duty landed, or you are comparing two suppliers whose quotes bundle different costs. Either way, this guide gives you the formula, the five components, a worked China-to-USA example, and the mistakes that quietly erode margin.

Throughout, every duty rate and freight figure is an approximate reference band for orientation; the exact duty and price for your shipment depend on your HS code, origin, and route, and always require manual confirmation.

What is landed cost and why it decides your margin

Landed cost is the total cost of getting a product from the supplier's factory floor to your receiving dock, expressed per unit. It is the only cost figure that tells you whether a product is worth importing, because it captures everything you pay, not just the price on the supplier's invoice.

A common belief is that "my cost per unit is basically the supplier's price." In reality, the supplier's price (often quoted FOB) covers only the goods themselves and getting them onto the vessel. Freight across the Pacific, US customs duty, cargo insurance, and the fees charged at origin and destination all add to that. For many products, those additions run to 20–40% on top of the product price — enough to turn a healthy margin into a loss.

This is why landed cost is a sourcing and pricing tool, not just an accounting metric. The buyer who calculates it first compares suppliers and routes on real margin, not on headline price. Once you have a landed cost estimate, you can compare Chinese logistics companies by route coverage and price band to bring the freight component down.

The landed cost formula (the five components)

The landed cost formula is simple to state and easy to underestimate:

Landed cost = Product + Freight + Customs duty + Insurance + Fees

Then divide by the number of units to get the landed cost per unit. The five components:

• Product: the price you pay the supplier, usually quoted FOB (goods delivered onto the vessel) or EXW (goods at the factory gate, which adds inland haulage). This is the base everything else builds on.
• Freight: the international transport cost — ocean or air — from the origin port to your destination. This is where mode and route choice move the number most.
• Customs duty: the import tax charged by US Customs and Border Protection, calculated as a percentage of the customs value (typically the FOB value) and set by your product's HS code.
• Insurance: cargo insurance to cover loss or damage in transit, usually a small percentage of the shipment value.
• Fees: everything else — origin handling, destination port and terminal charges, customs brokerage, documentation, and any bank or currency-conversion costs.

Miss any one of these and your landed cost is wrong on the optimistic side, which is exactly how products that looked profitable end up losing money.

How to calculate landed cost step by step

Here is the process in order, from the supplier's quote to a defensible per-unit number.

1. Start with the product cost and unit count. Confirm whether the price is FOB or EXW; EXW means you also pay inland haulage to the port. Note the total units in the shipment.
2. Get the freight cost. Request a freight quote for your mode and route. Ocean LCL is billed per CBM, air freight per chargeable kg. Treat any figure as an approximate reference band until confirmed for your specific shipment.
3. Classify your product and estimate duty. Find the correct HS code and look up the duty rate for imports into the US. Duty = customs value × duty rate. The customs value is usually the FOB value.
4. Add insurance and fees. Insurance is commonly a fraction of a percent of shipment value; fees include origin, destination, brokerage, and documentation charges, which can dominate on small shipments.
5. Sum and divide by units. Landed cost per unit = (Product + Freight + Duty + Insurance + Fees) ÷ Units. Compare that against your intended selling price to see the real margin.

Worked example: one product from China to the USA

A US seller imports 1,000 units of a kitchen gadget from a supplier in Ningbo.

• Product (FOB): $4.00 per unit → $4,000
• Freight (ocean LCL, ~4 CBM): approximate reference band → $400
• Customs duty (assume 3.5% on the $4,000 customs value): → $140
• Cargo insurance (~0.5% of value): → $25
• Fees (origin + destination + brokerage + docs): → $350

Total landed cost = 4,000 + 400 + 140 + 25 + 350 = $4,915, so landed cost per unit = $4.92 — about 23% above the $4.00 FOB price. If the seller planned to sell at $8.00 budgeting on the FOB price (expecting a 50% margin), the real margin is closer to 38%. A higher-duty product or a switch to air freight would move the number further. Every figure here is an approximate reference band; the actual duty and freight for your shipment require manual confirmation.

Landed cost vs FOB vs COGS

These three terms are often confused, and mixing them up is the root of most margin surprises.

• FOB (Free On Board): the price of the goods loaded onto the vessel at the origin port. It excludes international freight, insurance, duty, and destination fees. FOB is an input to landed cost, not the final number.
• Landed cost: FOB plus everything to your door — freight, duty, insurance, and fees. This is the true cost basis for pricing.
• COGS (Cost of Goods Sold): an accounting measure of the direct cost of the units you actually sold, which starts from landed cost but is reported over a period and may include other direct costs. Landed cost is a per-shipment planning number; COGS is a per-period accounting number.

The practical rule: price on landed cost, not FOB, and do not assume COGS from your books already captures a new product's true import cost until you have run the landed cost math for that specific shipment.

Common landed cost mistakes that erode margin

1. Budgeting on the FOB price. The most common error. Freight, duty, insurance, and fees routinely add 20–40%, so a product that looks profitable at FOB can lose money at landed cost.
2. Guessing the duty rate. Duty depends on the HS code and origin. A misclassified product can carry a much higher rate than expected, so confirm the classification before you price.
3. Ignoring destination and brokerage fees. On small shipments, fixed fees at origin and destination can exceed the freight leg itself. Compare full door-to-door structures, not headline freight rates.
4. Forgetting de minimis and tariff rules. Low-value shipments may clear duty-free under the US de minimis threshold, but the rules are product- and policy-dependent and change; verify the current treatment for your goods before relying on it.
5. Comparing suppliers on product price alone. Two suppliers quoting different Incoterms (one EXW, one FOB) are not comparable until both are converted to landed cost on the same route.

Case study: the hidden-cost reprice

A US-based pet-products seller was choosing between two suppliers for a new chew toy. Supplier A quoted $2.10 per unit FOB; Supplier B quoted $1.85 EXW. On product price, Supplier B looked 12% cheaper, and the seller was ready to commit.

Running the landed cost math flipped the decision. Supplier B's EXW price needed inland haulage to the port added (about $0.15 per unit), and the seller's initial freight estimate had used an outdated per-CBM band. Once freight, a 4.3% duty on the customs value, insurance, and fees were added to both, Supplier A landed at about $2.71 per unit and Supplier B at about $2.68 per unit — within a cent of each other, not the 12% gap the headline prices suggested. The seller chose Supplier A for its more reliable lead time, and priced the product on the $2.71 landed cost instead of the $2.10 FOB figure, protecting a margin that the headline price would have overstated by roughly 23%.

Landed cost is the first input to pricing and route comparison, not the last word. SaveOnShip is a China-to-global logistics route lookup and comparison platform, not a carrier, a freight forwarder, or an insurer. Once you know your landed cost, you can compare Chinese logistics companies by route coverage, price band, and data freshness, browse destination-country route options, see top-rated providers by route, read how our route data is sourced and bounded, and compare shipping options side by side, all before you talk to anyone. For related reading, see our guides to the CBM calculator for shipment volume, the dimensional weight calculator for billable weight, and the harmonized tariff code guide for duty classification. For official US import requirements, the U.S. Customs and Border Protection portal is the authoritative reference, and the U.S. International Trade Commission maintains the tariff schedule.

Frequently asked questions

How do you calculate landed costs?

Add the five components — product, freight, customs duty, insurance, and fees — then divide by the number of units. Landed cost per unit = (Product + Freight + Duty + Insurance + Fees) ÷ Units. Duty is the customs value (usually the FOB value) multiplied by the duty rate for your product's HS code.

What is a landed cost price?

A landed cost price is the total all-in cost of one unit of product delivered to your door: the supplier price plus international freight, customs duty, insurance, and all fees, divided by units. It is the true cost basis for pricing, and it is almost always higher than the supplier's quoted product price.

How do I know how much I will pay for customs?

Customs duty = the customs value of your shipment (typically the FOB value) multiplied by the duty rate for your product's HS code, set by the destination country. To estimate it, classify your product under the correct HS code, look up the rate for US imports, and apply it to the customs value. Exact duty requires manual confirmation, often with a customs broker.

What is an example of landed cost?

If a $4.00-per-unit product ships 1,000 units with $400 freight, $140 duty, $25 insurance, and $350 in fees, the total landed cost is $4,915, so the landed cost per unit is $4.92 — about 23% above the $4.00 product price.

What is the difference between FOB and landed cost?

FOB (Free On Board) is the price of goods loaded onto the vessel at the origin port; it excludes international freight, insurance, duty, and destination fees. Landed cost is FOB plus all of those to your door. FOB is an input to landed cost, not the final number.

Is landed cost the same as COGS?

No. Landed cost is a per-shipment planning figure — the all-in cost of getting a specific shipment to your door. COGS (Cost of Goods Sold) is an accounting measure of the direct cost of the units you actually sold over a period, which starts from landed cost but is reported across your books. Use landed cost to price and plan, and COGS to report.

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Disclaimer: Figures in this article, including duty rates, freight price bands, insurance percentages, and fee levels, are typical reference values for orientation only, not live rates, binding prices, tax advice, or a promise of space or availability. Duty rates, de minimis rules, and freight prices vary by product classification, origin, route, and season, and any shipment-specific pricing or duty requires manual confirmation with the provider or a licensed customs broker. SaveOnShip is a route lookup and comparison platform, not a carrier, a freight forwarder, a customs broker, an insurer, or a place to book shipments.*