Landed Cost
Landed cost is the total cost of getting an imported product to your warehouse — including the product price, international freight, customs duties, insurance, storage, and local delivery. Calculating landed cost accurately is essential for knowing your true profitability.
Landed cost describes the full amount it takes to get a product from your supplier all the way to your warehouse, ready to sell — not just the base purchase price. The main components are: FOB price (the price at the factory or port of origin), international freight (air or sea), shipping insurance, customs duties, import VAT, port storage fees, and finally local delivery from the port to your warehouse. Many stores calculate only the supplier's purchase price and ignore the rest — a common mistake that leads to mispricing and lower real-world profitability than the numbers on paper suggest. For example, a product with a base price of $15 can actually cost $22-24 once freight, customs, and import VAT are added — a 50-60% gap that must factor into the selling price. In StoreChart, the import module automatically calculates landed cost for every shipment and feeds it directly into the profitability module, so every profit report is based on the real cost, not just the purchase price.
The gap between purchase price and landed cost tends to widen with distance and regulatory complexity: a domestic supplier might add only a small local delivery fee, while an overseas container shipment can add customs duties, import VAT, freight forwarder fees, and port storage that together exceed the product's original price. Currency exchange rate movement between the purchase date and the payment date is a frequently overlooked landed-cost component — a supplier invoiced in USD or EUR can end up costing meaningfully more or less by the time payment clears, and that swing should be reflected in the cost basis used for pricing, not absorbed silently into margin.
This calculation matters most for stores that import stock — StoreChart's imports/procurement module exists precisely because landed cost is rarely obvious from a supplier invoice alone; customs fees, freight-forwarder charges, and currency conversion at the time of payment all have to be captured and allocated back to specific units before true per-item profitability (the profitability module's core job) is even calculable. A business that prices only off the supplier's quoted unit cost, ignoring these layered-on charges, will consistently overstate its margin on every imported SKU.
Many stores discover they've been underpricing an entire imported category only after a landed-cost audit reveals customs and freight were never actually added to the base cost — a mistake that can persist for months since gross revenue and unit sales both look healthy right up until someone checks true per-unit profit.
Related terms
A SKU is a unique identifier assigned to a specific product or variant within an inventory management system. Each SKU represents one distinct combination of attributes (color, size, model) and is used for inventory tracking, orders, and reporting. In StoreChart, SKUs are automatically synced across every connected store.
Inventory management is the process of tracking, controlling, and optimizing every product held in a warehouse. It covers stock counts, purchase orders, minimum-stock thresholds, and low-stock alerts. A good inventory management system prevents both stockouts and overstock, and directly improves customer satisfaction.
Frequently asked questions
Typically not directly — landed cost covers getting a unit of good inventory to the warehouse. Returns and damage are usually tracked as a separate cost category, though a high damage rate on a specific shipping route should factor into whether that route or carrier is worth continuing to use.
Currency exchange rates at time of payment, customs duty rate changes, seasonal freight rate fluctuations, and whether a shipment triggers a customs inspection (adding delay and inspection fees) can all shift landed cost between otherwise identical orders.
Per shipment for accuracy, since freight and currency rates change between orders. An averaged or estimated landed cost is a reasonable starting point for quick pricing decisions, but real profitability reporting should reconcile against the actual landed cost once a shipment clears customs.