The formula
Landed cost = product cost + freight + insurance + import duty + other fees, then divide by the number of units to get the cost per unit.
Worked example
The real cost per unit is $6.03 — $1.53 more than the $4.50 supplier price. Run your own numbers in the Landed Cost Calculator.
| Item | Amount |
|---|---|
| Product: 1,000 units × $4.50 | $4,500 |
| Freight | $900 |
| Insurance | $40 |
| Import duty: 7.5% of $4,500 | $337.50 |
| Broker, port and other fees | $250 |
| Total landed cost | $6,027.50 |
| Per unit | $6.03 |
Duty basis: product value or CIF?
Countries calculate duty on different values. The US generally uses the product (transaction) value, while many countries, including the EU, use CIF — product + freight + insurance.
In the example, CIF duty would be 7.5% of $5,440 = $408, raising the cost per unit to $6.10. Check which basis applies where you import.
Tips
- Find your product’s HS code first — it decides the duty rate.
- Compare supplier quotes only after adding what each Incoterm leaves out.
- Use landed cost, not supplier price, in your profit margin and fee calculations.