Landed Cost is the final total cost associated with a product for it to reach the buyer’s doorstep.

Landed costs include the original cost of the item, complete shipping costs, customs duties, taxes, insurance, currency conversion fees, etc. All of these components might not be applicable in every shipment, but relevant components must be considered as a part of the landed cost.

What is Landed Cost?

To understand landed cost better, let’s take an example based on our daily lives. You need to purchase a new washing machine for your home. Before making an actual purchase, you probably do some research to know the best price. In this process, you often found a better deal from a store which is long away from your home. But you should also consider shipping cost while buying from that store. Total cost including shipping might be more than the price you get in your nearby store. In that case, you will choose to buy from your nearest store, as the landed cost of the item is cheaper in the nearest store.

Similarly in business, identifying landed cost for an Item/product is very crucial, as it helps to decide selling cost of that item and impacts the company’s profitability. Hence all applicable landed cost charges should be included in Item’s valuation rate.

According to the Third-Party Logistics Study, only 4