Landed cost is the total amount you pay to get a product from a Chinese factory to your warehouse, ready to sell. Many first-time importers focus only on the unit price and are surprised by the final cost. Here is how to calculate it accurately.
1. The landed cost formula
Landed cost per unit = (Unit price + Freight + Insurance + Duties + Other fees) / Quantity
2. Unit price
This is the FOB price per unit your supplier quotes. It usually includes production, packaging and delivery to the port in China.
3. Freight
- Sea freight — $1,500–3,500 per 20ft container
- Air freight — $4–8 per kg
- Express — $8–15 per kg, for small parcels
Freight cost per unit drops significantly when you fill a full container.
4. Insurance
Usually 0.3–0.5% of the total cargo value. Always insure — the cost is small compared to the risk.
5. Duties and taxes
- US — varies by HTS code, typically 0–25% of value
- EU — import duty 0–17% + VAT 17–27%
- UK — duty 0–12% + VAT 20%
Check the HTS code for your specific product. Wrong classification can cost you thousands.
6. Other fees
- Customs broker — $100–300 per shipment
- Destination port fees — $200–500
- Inland trucking — $100–500
- Amazon FBA prep — $0.5–2 per unit
7. Example calculation
A 1,000 pcs order of mosquito killer lamps:
- Unit price FOB — $5.00
- Sea freight — $1,500 / 1,000 = $1.50
- Insurance — $50 / 1,000 = $0.05
- Duty 3% — $150 / 1,000 = $0.15
- Broker + port fees — $500 / 1,000 = $0.50
- Landed cost = $7.20 per unit
8. Target pricing
- Retail price = landed cost × 3 to 5
- Amazon fees — 30–40% of retail
- Net margin target — 20–30%
If you are unsure how to calculate landed cost for a specific order, send us the product and destination — we can prepare a full cost analysis for you.