Landed Cost
Duty & Tax Basics · Cost Calculation
What is Landed Cost?
Landed cost is the true total cost of getting a product from a foreign seller to your door - not just the price shown at checkout, but every charge added along the way: shipping, insurance, customs duty, import VAT or tax, and any carrier handling fee.
It's the number that actually matters for comparing a foreign purchase to a domestic one, since the checkout price alone can understate the real cost by a large margin once duty and tax are added.
If the sticker price is what a store shows you, the landed cost is what actually leaves your bank account once the item is in your hands - shipping, taxes, duty, and any extra fee the courier tacks on are all folded in.
When to Use It
Use landed cost whenever you’re deciding whether a foreign purchase is actually cheaper than a domestic one, or when pricing goods for resale - the checkout price alone is not a reliable basis for either decision.
Examples for Landed Cost
| Cost component | Example ($299.99 headphones, US to UK) |
|---|---|
| Item price | $299.99 |
| Shipping | $24.99 |
| Customs duty (est.) | +$37.50 |
| Import VAT (20%) | +$72.50 |
| Total landed cost | $434.98 |
The most common mistake is treating shipping cost as the only 'extra' charge and stopping there - duty and VAT together are often several times larger than shipping on a typical cross-border order, and are the charges most likely to be missing from the number shown at checkout.
Frequently Asked Questions About Landed Cost
Is landed cost the same as the price shown at checkout?
Not usually. The checkout price often reflects only the item and shipping - duty, import VAT, and any carrier handling fee are frequently added later, either at checkout by a registered seller or on delivery by the courier.
Does landed cost include the seller’s domestic sales tax?
No - landed cost is specifically about cross-border charges (duty, import VAT/tax, handling). A seller’s own domestic sales tax, where applicable, is a separate consideration.
Why does landed cost matter for bulk or wholesale orders?
Because duty and tax scale with value, the gap between the sticker price and the landed cost grows with order size - for resale pricing, using landed cost per unit rather than the wholesale price alone is essential to avoid pricing at a loss.
How Well Do You Know Landed Cost?
3 questions - about a minute.