All About Landed Costs: What Is & Why It Matters To Your Profit

A landed cost is the total price of a product or shipment once it has arrived at your doorstep. The landed cost considers the original price of the product, transportation fees (both inland and ocean), customs, duties, taxes, tariffs, insurance, currency conversion, crating, handling, and payment fees.

When running an international supply chain, calculating your landed cost per product is crucial. This calculation allows you to correctly identify all costs associated with your products and therefore how much profit you are making.

If you already calculate landed costs, you may want to consider if you are costing your freight properly or just averaging your freight costs? A true landed cost will take into account all facets of shipping and weigh all costs correctly against your products.

Why does a Landed Cost matter to my business?

Profit. Profit. Profit.

Do you have a clear understanding of exactly how much profit you make on each item you sell? Do you have a proven formula that takes into account all associated costs with bringing your products into a store? If not, a landed cost report will be invaluable to your business.

By getting on top of your landed costs you can identify what items are adding value to your business and what items are causing more expense than the return. From here you can review your supply chain and purchasing processes to ensure you maximise your business profits.

How can I obtain this information with ease?

When looking at landed costs one of the things to consider is how long it takes to obtain your landed price. Are you using excel with complicated formula? Do you have an accounting system that does this for you? Are you doing this manually or are you not doing this at all?

If you are looking to move away from cumbersome processes, ICE can provide a landed costing report for every shipment automatically. If you have chosen ICE as your broker and we manage your shipment from A to B, our forwarding system already holds the costs associated with your import, including duties and GST.

What does a landed costing report look like?

The landed costing report we produce provides you with a breakdown of cost line by line against your commercial invoice. It takes into account the costs of all charges associated with moving your goods from A to B, and details how these charges directly correlate to the value of your product. Each item will have an associated line price and this line will be broken down into a cost per unit. All of your shipping charges will be listed including handling, freight, duties and GST.

Landed Costing sheet Template

One Last Tip

Don’t struggle with cumbersome in-house customs processes. Contact ICE today and benefit from landed costing reports that allow you to take your product straight into stock!

Please note. The downloadable landed costing report is intended as a guide and an example only and is not a precise reflection of how your data would be pulled from our system.

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