Landed Cost
Landed Cost is the total cost of getting a product to your warehouse ready to sell: purchase price plus freight, insurance, duties, tariffs, brokerage, and handling.
Why it matters for ecommerce brands
Gross margin calculated on factory price alone overstates profit, especially when tariffs change.
Formula and example
Landed cost per unit = (product cost + freight + insurance + duties and tariffs + brokerage + drayage and handling) ÷ units
Common questions
- What costs are included in landed cost?
- Landed cost includes the product price plus freight, insurance, duties and tariffs, customs brokerage, drayage, and handling needed to get the product into your warehouse. Outbound shipping to customers is not part of landed cost.
Cite this entry
"Landed Cost." Fulfillment Lexicon, last reviewed October 16, 2026. https://fulfillment.wiki/glossary/landed-cost/