In plain words
Landed cost is what a unit really costs once it has arrived at your warehouse, ready to sell. That is the supplier's price, plus the freight to bring it in, import duties, customs brokerage, and anything else paid per unit before it reaches a shelf.
For offers it is the honest unit cost. A bundle discount or a free gift priced against the supplier's price alone looks cheaper than it is. That gap is widest for imported goods, where freight and duty can add a large share to the price.
Formula
- Landed cost per unit = supplier price + inbound freight per unit + duties per unit + other per-unit import costs
Worked example
The coffee bag's $12.00 unit cost is a landed cost: $10.50 the supplier's price, $0.95 inbound freight, $0.55 duty. The engine sums the three as per-unit costs: $12.00.
Enter the supplier's price alone and every margin looks better than it is, by the freight and duty on each unit.
The example order
A $40.00 bag of coffee, shipped free, every cost counted
2 declared kinds cost nothing on this option
| Step | Grain | Amount |
|---|---|---|
| Revenue | – | $40.00 |
| cogs | per unit | −$12.00 |
| pick_pack | per order | −$1.18 |
| packaging | per parcel | −$0.50 |
| shipping | per parcel | −$7.50 |
| processing_fixed | per order | −$0.30 |
| refunds | percent | −$2.00 |
| processing | percent | −$1.16 |
| Gross margin | – | $15.36 |
| 2 kinds costing nothing | – | $0.00 |
Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.
Landed cost is not fulfilment cost
Landed cost stops at your warehouse. Picking, packing and shipping the order to a customer is fulfilment, and it is charged per order or per parcel, not per unit. Mixing the two double-counts shipping or loses it.
Using it
Recalculate it when freight rates, duties or currency move, and date the change: an order placed before a tariff change should keep the cost it had. For products bought in batches, use the landed cost of the batch the units came from, or a weighted average across batches in stock. The per-unit figure is what every offer calculation should start from.