--- title: "Landed cost: definition, formula and example" description: "A unit's full cost on your shelf: the supplier's price plus inbound freight, duties and brokerage. The unit cost an offer should be priced on." url: https://offersuite.io/glossary/landed-cost updated: 2026-10-13 --- # Landed cost A unit's full cost on your shelf: the supplier's price plus inbound freight, duties and brokerage. The unit cost an offer should be priced on. ## 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 Revenue $40.00 to contribution margin $15.36 (38.4%) Revenue $40.00 Cost of goods −$12.00 Pick and pack −$1.18 Packaging −$0.50 Shipping label −$7.50 Card fee per order −$0.30 Refunds −$2.00 Card processing −$1.16 Contribution margin $15.36 2 declared kinds cost nothing on this option 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. ## Related - [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary) - [Calculator **Bundle pricing calculator: shipping, subscriptions** Price a bundle against a single unit, one-time and subscribed, with the shipping and pick costs it saves, and the conversion it can lose and still earn as much.](https://offersuite.io/calculators/bundle-pricing) - [Calculator **Gift with purchase profit calculator** What a free gift costs per order, after its unit cost, its extra pick and its handling, and how much conversion it has to add to pay for itself.](https://offersuite.io/calculators/gift-with-purchase-profit) - [Glossary **Cost of goods sold (COGS): definition and formula** What the units you sold cost you to make or buy. In an offer calculation it is charged per unit, gifts included, at the cost in effect on the order's date.](https://offersuite.io/glossary/cost-of-goods-sold) - [Glossary **Fulfilment cost: definition, formula and example** What it costs to get an order out: pick and pack, extra picks, the box and the label. Charged per order or parcel, which is why bundles and gifts change it.](https://offersuite.io/glossary/fulfilment-cost) - [Glossary **Gross margin: definition, formula and example** Revenue minus the cost of the goods sold, as a share of revenue. The accounting margin: it leaves out shipping, fulfilment and payment costs.](https://offersuite.io/glossary/gross-margin)