Landed cost
Landed cost is the full cost of a product by the time it arrives at your door, ready to sell. It is the supplier's price plus everything paid to get it there.
Updated
- Formula
- landed cost = purchase price + freight + insurance + duties and taxes + handling
- Also called
- total landed cost, landed unit cost
- Purchase price$19.00
- Freight$1.30
- Duty$0.95
- Brokerage and handling$0.15
- Landed cost$21.40
The parts
- Purchase price: what the supplier charges per unit.
- Freight: getting the goods from the supplier to you.
- Insurance on the shipment.
- Duties and taxes that you cannot reclaim.
- Handling: customs brokerage, port fees, receiving charges.
Worked example
A shipment of 400 throws:
| Shipment | Per unit | |
|---|---|---|
| Purchase price | $7,600.00 | $19.00 |
| Freight | $520.00 | $1.30 |
| Duty at 5% of value | $380.00 | $0.95 |
| Brokerage and handling | $60.00 | $0.15 |
| Landed cost | $8,560.00 | $21.40 |
The supplier’s invoice says $19.00. The product costs $21.40. Pricing from the invoice figure overstates the margin on every unit sold.
Keeping it per unit
Freight and duty arrive as bills for a whole shipment, and a product’s cost has to be a figure per unit. There are two ways to hold it:
- One number. Add everything up and record $21.40 as the unit cost.
- Separate lines. Record the $19.00 purchase price as the unit cost and freight, duty and handling as their own costs on top. You can then see which part moved when the total changes.
Cogsy supports both. With cost kinds you can keep freight and duty as separate per-unit lines and choose to include them in the cost written to Shopify. It does not split a shipment’s bill across products for you; you enter the per-unit result.
Questions
- Is landed cost the same as COGS?
- Landed cost is the per-unit figure; COGS is the landed cost of all the units sold in a period.
- Does landed cost include shipping to the customer?
- No. It stops when the stock reaches you. Delivery to the customer is a selling cost.
- How do I split a freight bill across products?
- By a measure that reflects what drove the charge. By unit count is simplest, by weight or volume is fairer for mixed shipments, and by value suits duties and insurance. Choose one and use it consistently.
Related
Guide
Landed cost in Shopify after StockyStocky ended on 31 August 2026 and Shopify purchase orders do not change cost per item. How to keep a landed cost per unit in Shopify now, by hand or with an app.
Cost type
Inbound freightHow to turn a freight invoice into a per-unit cost for Shopify products, the three ways to allocate it across a mixed shipment, and a worked example.
Cost type
Import dutiesHow to work out import duty per unit for a Shopify product, which taxes count as cost and which are reclaimed, and how to record duty so a rate change is visible.
Glossary
Unit costUnit cost is what one unit of a product costs you to buy or make. How to calculate it for bought and made goods, and what belongs in it.