How do I calculate landed cost on imported inventory?

Landed cost is the total cost of getting a product to your door: what you paid the supplier, plus freight, insurance, duties and tariffs, customs fees, broker charges and delivery. Add them up for a shipment, then divide by the number of units. That per-unit figure is the one to price from, not the supplier's invoice price.

The formula

Landed cost per unit = (product cost + freight + insurance + duties and tariffs + customs fees + broker fees + other handling) ÷ units received

Use units that actually arrived and are sellable, not units ordered.

What goes into it

• Product cost. The supplier invoice, including any packaging, tooling or inspection charges.
• International freight. Ocean, air or courier charges to the US port or airport.
• Cargo insurance. If you buy it, it counts.
• Duties and tariffs. Charged on the declared customs value, at the rate for your product's classification and country of origin. CBP says it, not the importer, makes the final call on the correct duty rate. Additional tariffs can apply depending on where the goods come from, so check the current rate for your product and origin rather than reusing last year's.
• Merchandise processing fee (MPF). For formal entries, CBP charges 0.3464 percent of the value as of October 2026, with a minimum and maximum that are adjusted each fiscal year. On a $20,000 shipment, 0.3464 percent works out to $69.28. Ocean shipments can also carry a harbor maintenance fee. Confirm both with your broker.
• Customs broker fees. Entry filing, bond and similar charges.
• Port, terminal and drayage charges, and inland delivery to your warehouse.
• Bank and payment costs. Wire fees or currency conversion on the supplier payment belong in the total too.

A simple worksheet

Build one row per shipment in a spreadsheet:

Mistakes that distort the number

1. Ignoring the sale terms. Check whether the price is FOB, CIF or another Incoterm, because that changes what is in the customs value and what you pay separately.
2. Using the wrong classification. A wrong code means a wrong duty rate. Look up the HS code before you cost the shipment.
3. Ignoring damage, shrink and returns. Divide by sellable units.
4. Averaging across different shipments. Each shipment has its own freight and duty, so cost it separately.
5. Leaving out time. Money tied up in transit has a cost too.

From landed cost to price

Once you have the per-unit number, set your price from it. Marketplace fees, shipping to customers, ads and returns come on top, so check your margin against the total cost, not just the landed figure.

How Shield helps

Shield is a US financial platform for trade businesses. One practical trick is to put freight, insurance and broker charges for a shipment on a Shield business credit card, so every charge is tied to its shipment and the numbers for your worksheet are in one place. Card transactions sync to QuickBooks. Shield cards are pay-in-full, with no interest, and no upfront or subscription fees for cardholders. Where a supplier takes only wires, you can send a wire from your credit line. Shield also pays suppliers in China and Hong Kong.

FAQ

Is landed cost the same as COGS? Not exactly. Landed cost builds up the cost of inventory you bought. Cost of goods sold is the cost of what you sold in a period. Ask your accountant how to record it.

Do I pay duty on shipping costs? It depends on how the customs value is determined, which depends on the sale terms. Ask your customs broker.

Can I estimate duties before I order? Yes. The USITC tariff database gives an approximate rate, but CBP's page warns the result is only as accurate as the information entered. A broker can confirm.

Next step

To see how Shield's business credit card supports inventory purchases, visit Shield business credit cards.