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Inventory & supply chain

Landed cost calculator — cost per unit with duty and freight

Calculate landed cost per unit: freight, insurance, brokerage and duty allocated across a shipment by value or by unit count, with the % uplift.

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Short answer

Landed cost per unit is the goods cost plus duty plus each unit's share of freight, insurance, brokerage and other shipment charges. Duty applies as a percentage of goods value; the rest is allocated by unit count or by value. A $57,255 shipment with 6.5% duty and $6,755 of charges lands 18.3% above cost.

Landed cost is the number your margin actually depends on. A quoted unit price of $4.15 that arrives at $6.07 after freight and duty turns a 30% margin into 12%, and nothing in the purchase order warned you.

Enter the lines in a shipment, the duty rate you have classified for, and the charges billed for the container as a whole. The calculator allocates those charges, applies duty to each line's goods value, and returns landed cost per unit, total landed cost and the percentage uplift over supplier price.

The allocation basis toggle matters more than most people expect. Switch it and watch which line carries the freight.

Your numbers

Shipment lines
units
$
units
$
units
$

Set a quantity to 0 to ignore a line.

Shipment-level costs
%

Your own classified rate, applied to each line's goods value. We do not guess HS codes or tariff schedules.

$

International plus inland.

$
$
$

Drayage, port fees, inspection.

Allocate shipment costs by

Result

Total landed cost
$67,732

18.3% above the $57,255 of goods, allocated by goods value

Goods value (supplier price)$57,255
Duty at 6.5%$3,722
Freight, insurance, brokerage, other$6,755
Landed cost uplift18.3%
Blended landed cost per unit$16.52
Non-goods cost per unit$2.56
Shipment costs of $6,755 allocated by goods value.
LineUnitsGoodsDutyAllocatedLandedPer unitUplift
Line 1 — 1,200 at $18.401,200$22,080$1,435$2,605$26,120$21.7718.3%
Line 2 — 400 at $62.00400$24,800$1,612$2,926$29,338$73.3418.3%
Line 3 — 2,500 at $4.152,500$10,375$674$1,224$12,273$4.9118.3%
Shipment total4,100$57,255$3,722$6,755$67,732$16.5218.3%
Goods = (1,200 × $18.40) + (400 × $62.00) + (2,500 × $4.15) = $57,255
Duty = $57,255 × 6.5% = $3,722
Shipment costs = $4,850 + $310 + $675 + $920 = $6,755
Landed = $57,255 + $3,722 + $6,755 = $67,732
Uplift = $67,732 ÷ $57,255 − 1 = 18.3%
18.3% on top of supplier price is enough to change a pricing decision. Allocated by goods value, every line lands at the same 18.3% uplift, because duty is value-based as well. Switch to unit count and the range across lines opens to 9.2%–46.2%.

Everything is computed in your browser. Nothing you type is sent anywhere or stored.

The formula

Landed cost per unit = (Goods value + Duty + Allocated shipment costs) ÷ Units; Duty = Goods value × Duty rate; Allocated = Shipment costs × Line share
Goods value
Quantity × supplier unit price for the line, before any freight or duty. Ex-works or FOB, whichever your terms say.
Duty rate
The percentage you enter for your own classification and origin. It applies to the line's goods value.
Shipment costs
Freight, insurance, brokerage and other charges billed for the whole shipment, not per line.
Line share
The line's proportion of the shipment — either its share of total units or its share of total goods value.

Duty is a percentage of value, so a value-based allocation gives every line the same percentage uplift. A unit-count allocation loads the freight onto whichever line has the most pieces, which is usually the cheapest item. Neither is wrong; they answer different questions.

Worked example

Line 1
1,200 units at $18.40
Line 2
400 units at $62.00
Line 3
2,500 units at $4.15
Duty rate
6.5%
Freight
$4,850
Insurance
$310
Brokerage and customs
$675
Other (drayage, inspection)
$920
Result
$67,732 landed on $57,255 of goods — 18.3% uplift

Goods value is $22,080 + $24,800 + $10,375 = $57,255. Duty at 6.5% adds $3,722. Freight, insurance, brokerage and other total $6,755. Landed cost is $67,732, an uplift of 18.3%. Allocated by value, line 1 lands at $21.77 a unit and line 3 at $4.91 — both 18.3% up. Allocated by unit count, line 3 jumps to $6.07, a 46.2% uplift, while line 2 falls to 9.2%.

What belongs in landed cost

Everything you spend to get a unit onto your own shelf, ready to sell. Anything that happens after that point is a cost of selling, not a cost of the goods.

  • In: supplier price, duty and tariffs, international and inland freight, insurance, customs brokerage, port and terminal fees, drayage, inspection and testing, non-recoverable taxes, and bank or letter-of-credit charges tied to the shipment.
  • Judgement call: inbound handling and put-away labour. Include it if you can attribute it to a shipment; most teams fold it into overhead instead.
  • Out: outbound freight to the customer, sales commission, warehousing after receipt, and any tax you can reclaim.
  • Watch: currency. If the supplier invoice is in another currency, decide whether landed cost sits at the rate on the purchase order, the invoice or the payment — and then stay consistent.

Allocation basis changes who carries the cost

Shipment charges arrive as one number for the container. How you spread them across lines decides which item looks profitable. Using the example shipment above, the same $6,755 of charges produces two very different pictures:

LineUplift allocated by valueUplift allocated by unit count
Line 1 — 1,200 units at $18.4018.3%15.5%
Line 2 — 400 units at $62.0018.3%9.2%
Line 3 — 2,500 units at $4.1518.3%46.2%
Value allocation gives a flat uplift because duty is also value-based. Unit-count allocation pushes cost onto the high-count, low-price line.

Value is the conventional default and the one auditors expect. Unit count is closer to physical reality when freight is driven by pieces or pallets rather than by worth — a container of low-value hardware genuinely consumes the space. Weight or cubic volume allocation is better still where you have those figures per line; unit count is a workable stand-in when every line ships in similar packaging.

Where landed cost leaks into margin

The failure mode is almost always the same: purchasing negotiates on unit price, the ERP stores that unit price as standard cost, and the freight and duty land in a separate expense account. Item margin then looks fine while the gross margin in the general ledger does not, and nobody can reconcile the two.

  1. 1.Decide the allocation basis once and write it into the costing policy, not into each buyer's spreadsheet.
  2. 2.Load landed cost — not supplier price — as the standard cost, and let the difference show up as purchase price variance where you can see it.
  3. 3.Revisit the rate when freight moves. A container rate that doubles changes standard cost on every low-value item you import.
  4. 4.Check the resulting margin per line with the gross margin calculator before you publish a price list.

Pulling this together normally means a receipt report, a broker invoice, a freight bill and a manual apportionment. With you ask for it directly — "receipts for PO 4471 with the item costs, and the freight and duty posted against that receipt" — and the query is shown underneath so you can confirm what was included before it reaches a costing decision.

Frequently asked questions

How do you calculate landed cost per unit?

Add the goods value, the duty on that goods value, and the line's share of freight, insurance, brokerage and other shipment charges, then divide by the units on the line. With $10,375 of goods, $674 of duty at 6.5% and $1,224 of allocated charges across 2,500 units, landed cost is $4.91 per unit against a $4.15 supplier price.

What is included in landed cost?

Supplier price, duty and tariffs, international and inland freight, insurance, customs brokerage, port fees, drayage, inspection and any non-recoverable tax. Exclude outbound freight to your customer, sales commission and storage after receipt — those are selling and holding costs, not part of the cost of the goods.

Should freight be allocated by value or by weight?

By weight or cubic volume where you have those figures per line, because that is what the carrier actually charges for. Value is the common default and satisfies most costing policies. Unit count sits between the two and works when every line ships in similar packaging. Pick one and apply it consistently.

Is duty calculated before or after freight?

It depends on your customs valuation basis. Many jurisdictions assess duty on a CIF value that includes freight and insurance; others assess on the transaction value of the goods alone. This calculator applies duty to goods value, so if your basis is CIF, add the freight into the line prices before entering them.

Why is landed cost higher than the price on the purchase order?

Because the purchase order only carries the supplier price. Duty, freight, insurance, brokerage and port charges are billed separately, often weeks later and by different parties. On low-value, high-volume items those additions routinely exceed 30% of the supplier price, which is why the uplift percentage is worth tracking per item.

How does landed cost affect standard cost in an ERP?

If standard cost holds only the supplier price, every landed cost element becomes a variance and item margin overstates reality. Load landed cost as standard, and revise it when freight rates or duty change materially. Keep the allocation method in your costing policy so the number is reproducible at audit.

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