Glossary
What is landed cost?
Landed cost is the total per-unit cost of an imported product delivered to your warehouse — including FOB price, freight, insurance, duty, customs fees, port handling, and drayage. It's the only number that matters when calculating margin.
The formula
` Landed cost per unit = ( FOB unit cost × MOQ + chargeable freight + marine insurance + (FOB + freight) × duty rate + destination THC + CFS + ISF + broker + drayage ) ÷ MOQ `
What most importers miss
The visible cost (FOB or CIF) is usually 50-90% of the actual landed cost. The 10-50% hidden tail:
- Destination THC: $50-80/CBM
- CFS unloading (LCL only): $40-65/CBM
- ISF filing (US): $45 fixed per shipment
- Customs broker entry: $150-250 fixed per shipment
- Demurrage / detention: $50-95/day after free time
- Drayage: $3-8/mile from port to warehouse
For a small LCL shipment, these can multiply your "freight cost" by 4-7×. See the [LCL hidden cost analysis](/blog/hidden-cost-of-lcl-ocean-freight/).
Calculator
The /calculator/b2b-margin-calculator/ models all of this in one screen — toggle Incoterm, FOB rate, freight cost, duty rate and watch landed cost recompute live.
Why it matters for margin
Retail price ÷ landed cost = your real markup multiplier. Most importers calculate margin on FOB price, then get surprised when their actual margin is 30-50% lower than projected.
The fix: never quote a target retail until you've nailed landed cost.
Related pages