What Is Landed Cost?
Landed cost is the total cost of a product once it has arrived at your facility — covering every charge from factory door to warehouse shelf. It goes far beyond the invoice price.
TL;DR: Landed cost = product cost + international freight + customs duty + additional tariffs + customs fees + insurance + last-mile delivery. For China-origin goods in 2026, expect 40–60% above invoice price.
Landed Cost =
Product Cost (FOB/EXW)
+ International Freight
+ Marine Insurance
+ Customs Duty (value × HTS rate)
+ Additional Tariffs (§301, §232, ADD/CVD)
+ Customs Fees (MPF + HMF)
+ Brokerage + Inland Freight
Every Component of Landed Cost
The ex-works (EXW) or FOB price you pay the supplier. This is the starting point.
Ocean LCL/FCL, air freight, or express courier. Typically 3–15% of product value.
The import tariff applied by the destination country: product value × HTS duty rate.
Section 301 China surcharges (7.5–25%), anti-dumping duties, Section 232 steel/aluminium tariffs.
US Merchandise Processing Fee (0.3464%, min $34.58, max $670.86) + Harbor Maintenance Fee (0.125% ocean).
Broker fees for entry filing: typically $75–$200 per shipment.
Trucking from port to your warehouse or Amazon FBA. Often overlooked.
Marine cargo insurance: typically 0.5–1% of CIF value.
How to Calculate Landed Cost: Step by Step
Get your HTS code
Every product needs a 10-digit Harmonized Tariff Schedule code. This determines your base duty rate. Use an AI HS code classifier, the USITC Dataweb, or ask your customs broker. Misclassification is the #1 cause of unexpected duty bills.
Determine the customs value
For most US imports, customs value = the transaction value (invoice price). If your terms are CIF (cost + insurance + freight), US Customs uses the FOB value — you may need to subtract freight/insurance from a CIF invoice.
Calculate the base import duty
Multiply customs value × MFN duty rate from your HTS code. For example, a 12% rate on $20,000 of goods = $2,400 customs duty. Check USITC or Zentria Flow's calculator for the exact rate.
Add China-origin surcharges (Section 301)
If goods originate in China, stack the Section 301 tariff on top: 7.5% (List 1–3) or 25% (List 4A). This is the most commonly missed cost — on $20,000 at 25%, that's an extra $5,000.
Add US Customs fees
Add the Merchandise Processing Fee (0.3464%, min $34.58, max $670.86 per entry) and for ocean shipments the Harbor Maintenance Fee (0.125% of cargo value).
Add freight, insurance, and other costs
Add all origin and destination costs: international freight, marine insurance (0.5–1% of CIF), customs broker fees ($75–$200), port handling, inland drayage, and any warehouse receiving fees.
Sum everything = your landed cost
Total landed cost ÷ units = landed cost per unit. Compare this against your selling price to verify your margin. Most importers are surprised by a 30–50% uplift on Chinese-origin goods after tariffs.
Worked Example: Electronics from China
Importing $20,000 of consumer electronics (HTS 8518.30.20, 12% duty) from China via ocean freight to Los Angeles. Section 301 List 3 applies at 25%.
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Open Free CalculatorFrequently Asked Questions
What is the difference between landed cost and CIF?
CIF (Cost, Insurance, Freight) is the cost of goods up to the destination port — it does not include import duties, customs fees, or inland delivery. Landed cost includes all of these, giving you the true total cost at your warehouse door.
Does landed cost include VAT or GST?
In countries that apply VAT/GST at import (UK, EU, Australia, Canada), the import VAT is part of the landed cost. However, if you are VAT-registered, you can typically reclaim it on your VAT return — making it a cash-flow cost rather than a permanent one. Include it in your landed cost calculation if you are not VAT-registered.
What is a good landed cost margin?
A common target for e-commerce importers is a landed cost below 30–40% of retail price, leaving room for platform fees, returns, and profit. For Shopify sellers, aim to know your landed cost per SKU before setting retail prices — the Zentria Flow Shopify app can calculate this automatically from your product catalog.
How much do China tariffs add to landed cost in 2026?
Most consumer goods from China pay their Section 301 list rate (7.5% on List 4A, 25% on Lists 1–3, 0% on the suspended List 4B) plus the 12.5% forced-labor tariff on top of MFN — typically 12.5–37.5 points. Computers, phones and chips are exempt from the 12.5%. Rates changed several times in 2026, so use a live calculator.
Can I reduce my landed cost legally?
Yes. Common legal strategies include: using a free trade agreement (e.g., USMCA for Mexico/Canada production), applying for first sale for export valuation, bonded warehouse or Foreign Trade Zone (FTZ) deferral, duty drawback on re-exported goods, and reclassifying products to lower-duty HTS codes with a binding ruling from US Customs.
Related guides
Disclaimer: Tariff rates and landed cost estimates are advisory. Actual duties are determined by customs authorities at the time of import. For high-value shipments or complex supply chains, consult a licensed customs broker or trade attorney.