Landed Cost
Quick answer
The total real cost of a product up to the warehouse: purchase price + freight + duties + insurance + handling.
Key takeaways
- Supplier purchase price
- International and local freight
- Customs duties (per HS code) and import VAT
- Insurance, handling, demurrage
What landed cost is
Landed cost is the real cost of goods until they are available in the warehouse: the supplier price plus freight, customs duties, non-recoverable VAT, insurance, handling and other bringing-in costs.
Why it matters to the board
Pricing on purchase cost alone silently erodes margin. Landed cost shows the true cost and is the only correct basis for pricing, margin and sourcing decisions.
Components
- Supplier purchase price
- International and local freight
- Customs duties (per HS code) and import VAT
- Insurance, handling, demurrage
How CRMconnect helps
CRMconnect consolidates bringing-in costs on each receipt (freight, duties, Incoterm, HS code) to compute the real landed cost per SKU, correctly feeding gross margin and pricing.
Real-world example
A product with a 'good' purchase price had, with freight and duties, an 11% higher landed cost. Correct calculation in CRMconnect avoided selling at a loss.
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Frequently asked
Why isn't the purchase price enough?+
Because freight and duties can add significant percentages. Landed cost is the only cost on which you can build a correct margin.
Does landed cost depend on the Incoterm?+
Yes. The Incoterm decides which costs (freight, insurance, customs) are on you, so it directly influences landed cost.
Where CRMconnect fits
Related terms
Incoterms
Standardised international rules (ICC) defining who pays for transport, risk and customs in a commercial transaction.
LogisticsHS Code (Tariff Code)
The international customs classification code for goods, determining duties and import/export restrictions.
FinanceGross Margin
The difference between revenue and cost of goods sold, usually expressed as a percentage of revenue.
FinanceTotal Cost of Ownership (TCO)
The sum of all costs of a solution over its full life: acquisition, implementation, operation, maintenance and replacement.