What landed cost includes
The supplier's price is only the first line. Landed cost adds everything you pay to get the goods from the factory to your door, then divides by the number of units:
- Goods. The supplier's invoice, usually quoted FOB (free on board) at the origin port.
- Freight. Ocean, air, courier, or truck, from your forwarder's quote or invoice.
- Other charges. Customs brokerage, cargo insurance, drayage from the port, and CFS or warehouse handling.
- Duty. Every tariff layer that applies to the product: base (MFN) duty, plus any Section 301, Section 232, or newer tariffs.
- Customs fees. The Merchandise Processing Fee (MPF) on formal entries and the Harbor Maintenance Fee (HMF) on ocean shipments.
Selling costs such as marketplace fees and fulfillment are not part of landed cost. You subtract those later to find your profit.
The example shipment
Say you import 600 units of one product from China by ocean, on a formal entry. Your numbers:
| Input | Amount |
|---|---|
| Supplier price (FOB) | $18.75 per unit |
| Quantity | 600 units |
| Freight | $3,200.00 |
| Other charges (brokerage, insurance, drayage) | $650.00 |
| Base (MFN) duty | 3.9% |
| Section 301 | 25% |
| Other tariffs (forced-labor tier) | 12.5% |
The duty rates here are examples. Your rates depend on your product's HTS code and country of origin, so confirm them with a licensed customs broker.
Step 1: Find the goods value
600 units × $18.75 = $11,250.00. This is also the value customs charges duty on. US duty is figured on the goods value, not on freight or insurance, so keep those separate.
Step 2: Add up freight and other charges
$3,200 + $650 = $3,850.00, or $6.42 per unit. With more than one product in the container, you would split this across SKUs by volume, weight, or value. A bulky, cheap item should usually carry more freight than a small, expensive one.
Step 3: Calculate each duty layer
Each tariff is a percentage of the same $11,250 goods value. They add together; they don't compound.
| Layer | Rate | Duty | Per unit |
|---|---|---|---|
| Base (MFN) duty | 3.9% | $438.75 | $0.73 |
| Section 301 | 25% | $2,812.50 | $4.69 |
| Forced-labor tier | 12.5% | $1,406.25 | $2.34 |
| Total duty | 41.4% | $4,657.50 | $7.76 |
Step 4: Add the customs fees
As of October 1, 2026, MPF is 0.3464% of the goods value, with a minimum of $34.58 and a maximum of $670.86 per entry. HMF is 0.125% on ocean shipments.
- MPF: $11,250 × 0.3464% = $38.97 (above the minimum, so $38.97 applies)
- HMF: $11,250 × 0.125% = $14.06
Together that's $53.03, or about $0.09 per unit. Small here, but on low-value shipments the MPF minimum can cost more per unit than you'd expect.
Step 5: Divide by units
Step 6: Check your margin
Now price it. Suppose you sell at $79.99 on a marketplace that takes 15% in fees, and fulfillment costs $9.50 per unit:
- Profit per unit: $79.99 − $12.00 fees − $9.50 fulfillment − $33.02 landed = $25.47
- Profit margin: $25.47 ÷ $79.99 = 31.8%
- Price for a 30% margin: ($33.02 + $9.50) ÷ (1 − 0.15 − 0.30) = $77.30
If you had priced from the $18.75 invoice plus a rough guess for shipping, you could easily have set a price that loses money once the duty bill arrives.
Common mistakes
- Leaving out a tariff layer. Base duty alone was 3.9% here; the full stack was 41.4%.
- Charging duty on freight. For US entries, duty is based on the goods value, not the shipping cost.
- Splitting freight by units only. In a mixed container, that undercharges your bulky products and overcharges small ones.
- Never updating. Use the actual invoices and entry summary once the shipment lands, and track how the cost moves from order to order.
Run your own numbers
The free landed cost calculator has this exact example filled in. Change any number to price your product.
Importing more than one SKU?
TrueLanded splits every shipment's costs across all your products, tracks estimate vs. actual, and prices each sales channel.
This guide is for planning only and is not customs, legal, or tax advice. Confirm HTS classifications and duty rates with a licensed customs broker.