Landed cost is the true total cost to get goods to your door: the product cost plus freight, customs duties and taxes, insurance, and any other fees, added up and then divided across the units received to give a landed cost per unit. Add your product lines and shipment costs in the calculator below to see each line’s landed cost per unit and your blended cost per unit, and read on for how the allocation works and why it matters for pricing.
A free tool to work out what your goods really cost once freight, duty, and the rest are folded in, not just the supplier invoice.
The number on the supplier invoice is rarely what a unit actually costs you. By the time a shipment reaches your shelf it has picked up freight, customs duty, maybe insurance, and a handful of other fees. Landed cost is what you get when you add all of that to the product price and spread it back across the units, so the per-unit figure reflects the real cost of having the item in stock and ready to sell.
Most people who reach for a landed cost calculator want to check a shipment they are costing right now rather than read a lecture, so the tool comes first and the explanation second. There is also an honest section below on when a quick spreadsheet estimate is genuinely all you need.
Landed cost calculator
What is landed cost and how do you calculate it?
Landed cost is the total cost of getting a product from the supplier to the point where you can sell it. It has five common components:
- Product cost — what you pay the supplier for the goods themselves.
- Freight and shipping — the cost of moving the shipment, inbound.
- Customs duties and taxes — import duty and any recoverable or non-recoverable taxes on the goods.
- Insurance — cover on the goods while they are in transit.
- Other fees — brokerage, handling, port charges, and similar.
You add these together for the whole shipment, then divide back across the units to get a landed cost per unit. The reason this matters is simple: if you cost your inventory at the supplier price alone and leave freight and duty out, you understate your cost of goods sold and overstate your margin. Everything you decide from that number, your selling price, your markup, whether a product line is worth reordering, is then built on a cost that is too low.
Allocating shipment costs across product lines
A single shipment usually carries more than one product line, so the freight, duty, and other fees have to be shared out. There are two common ways to do it.
- By value (the default). Each line takes a share of the shipment costs in proportion to its goods value. A line that is 60% of the invoice value carries 60% of the freight and duty. This is the standard approach, because higher-value goods tend to justify a larger slice of the cost of moving and insuring the shipment.
- By quantity. Each line takes a share in proportion to units, so every unit in the shipment carries the same freight and duty regardless of what it cost. This can suit a shipment of broadly similar items, but it overloads cheap, bulky lines and under-costs expensive, compact ones.
The calculator above allocates by value, which is the sensible default for a mixed shipment and the same method Qoblex uses when it distributes landed costs internally.
Worked example, step by step
Say one shipment brings in two product lines:
- Line 1: 100 units at $20.00 each = $2,000 goods value.
- Line 2: 100 units at $30.00 each = $3,000 goods value.
That is 200 units and $5,000 of goods in total. Now add the shipment costs:
- Customs duty at 5% of the $5,000 goods value = $250.
- Freight = $600.
- Insurance = $50.
- Other fees = $100.
Additional costs come to $1,000. Allocated by value, Line 1 (40% of the goods value) carries $400 and Line 2 (60%) carries $600. So:
- Line 1 landed cost: ($2,000 + $400) / 100 units = $24.00 per unit, a $4.00 uplift over the $20.00 product cost.
- Line 2 landed cost: ($3,000 + $600) / 100 units = $36.00 per unit, a $6.00 uplift over the $30.00 product cost.
Total landed cost for the shipment is $5,000 + $1,000 = $6,000. Across 200 units that is a blended landed cost of $30.00 per unit, and the shipment carries a landed cost factor of 1.20x, meaning the extra costs added 20% on top of the product price. Load these figures into the calculator above and you should land on exactly those numbers.
Notice that the two lines do not move by the same per-unit amount even though they are equal in quantity. That is the by-value allocation at work: Line 2 is more expensive, so it absorbs more of the freight and duty. If you allocated by quantity instead, each of the 200 units would carry a flat $5.00, and both lines would look like a 5.00 uplift regardless of price. The choice of method changes the per-line margin you think you are earning.
When is a quick estimate enough, and when do you need it tracked?
Working out landed cost by hand is fine, and often the right call, when the stakes are low and the shipments are simple.
A single spreadsheet does the job when you bring in one product per shipment, your freight and duty are stable and predictable, and you reorder infrequently. In that situation a rough per-unit uplift, or a fixed landed cost factor you apply to the supplier price, gets you close enough to price sensibly. There is nothing wrong with that. It is how most businesses start, and for a small, steady import pattern it stays accurate for a long time.
The point where a manual estimate starts to cost you is worth naming plainly. When shipments carry several product lines that need allocating separately, when freight and duty swing from one order to the next, or when you reorder often enough that the per-unit cost keeps changing, keeping the allocation straight by hand turns into its own job. Worse, the landed cost usually needs to flow into your actual inventory cost and cost of goods sold, not just live in a pricing sheet, and re-keying it every time a purchase order is received is where the numbers quietly drift out of agreement.
How Qoblex handles landed costs
The calculator above is a simulator you drive by hand. Inside Qoblex, landed cost is handled where it belongs, on the purchase order. When you receive a purchase order, Qoblex distributes the landed costs such as freight and duties across the received units and folds them into the item’s moving average cost automatically, so your inventory value and cost of goods sold reflect the true landed cost without a separate spreadsheet. The allocation is done by value, so the more expensive items receive a larger portion of the freight cost (checked 2026-07-23), the same default the calculator uses above.
Because those landed costs feed straight into the moving average cost, the two ideas connect: the freight and duty you add on receipt are exactly what shifts each item’s blended cost per unit. If you want to see how that blended cost is recalculated after each purchase, the moving average cost calculator walks through it.
Your accounting platform stays your book of record. Qoblex handles the operational inventory costing, including landed costs on receipt, while QuickBooks Online or Xero keeps the ledger. For current plans, see qoblex.com/pricing.
FAQ
What is landed cost? Landed cost is the total cost of getting a product to the point where you can sell it. It is the product cost plus freight and shipping, customs duties and taxes, insurance, and any other fees, added together and divided across the units received to give a cost per unit.
Why does landed cost matter? If you cost your inventory at the supplier price alone and leave out freight and duty, you understate your cost of goods sold and overstate your margin. Landed cost gives you the real per-unit cost, which is what you should be pricing and making reorder decisions from.
How do you calculate landed cost per unit? Add up the product cost and all the shipment costs (freight, customs duty, insurance, other fees) for the whole shipment, then divide by the number of units received. For a shipment with more than one product line, allocate the shipment costs across the lines first, usually by value, then divide each line’s total by its own units.
Should I allocate shipment costs by value or by quantity? By value is the usual default: each product line takes a share of freight and duty in proportion to its goods value, so more expensive goods carry more of the cost. Allocating by quantity spreads the cost evenly per unit, which can suit a shipment of similar items but tends to over-cost cheap, bulky lines and under-cost expensive, compact ones.
What is a landed cost factor? It is the ratio of total landed cost to product cost. A factor of 1.20x means the freight, duty, and other fees added 20% on top of the supplier price. Some businesses apply a rough factor to the supplier price as a quick pricing shortcut.
Does landed cost affect my cost of goods sold? Yes. Landed cost is the correct cost to carry your inventory at, so it flows into cost of goods sold when the stock is sold. Costing at the supplier price alone leaves freight and duty out of COGS and makes your margin look higher than it is.
Does Qoblex calculate landed costs automatically? Yes. When you receive a purchase order in Qoblex, it distributes the landed costs such as freight and duties across the received units by value and folds them into the item’s moving average cost, so your inventory cost and cost of goods sold reflect the true landed cost without a separate spreadsheet.