What is "landed cost" in importing?
Landed cost is what a unit actually costs you by the time it is sitting in your warehouse, ready to sell. It is the purchase price plus carriage, insurance, duty, tax and the handling charges nobody quotes at the start.
It is the number to price against and the number to compare suppliers with. A cheaper unit price from a further away supplier in a higher-tariff origin is routinely the more expensive option.
The parts that are charged by governments
Duty is calculated from your code, your destination and your origin, and it is a permanent cost. Consumption tax is calculated on the customs value plus that duty, and for a registered business it is a cash flow cost rather than a permanent one.
Keeping those two apart is the single most useful thing you can do to your own numbers. Adding a recoverable tax into a unit cost inflates every margin calculation downstream of it.
The parts that are charged by companies
Carriage, cargo insurance, terminal handling, customs entry fees and final delivery are commercial charges, negotiated rather than legislated, and they vary by carrier, route, season and volume. They are not something a duty calculator can know.
They are also where the surprises live. Terminal and storage charges in particular are invisible until something goes slowly, and they are billed by parties you did not choose.
Per unit, not per shipment
Freight and fixed charges spread over the units in the consignment, so the same product has a different landed cost at different order sizes. A landed cost figure without a quantity attached to it is not a figure.
This is what makes small trial orders misleading. The unit economics of a sample shipment are not the unit economics of the shipment you would actually place.
Working it before you commit
Classify the product, price the duty and tax against the destination, get a real freight quote for the quantity you intend to buy, and add the handling charges your forwarder will confirm on request. Then divide.
The example below covers the government side of that, which is the half that can be established in advance and does not move with who you ship with.
Returns, damage and the costs that arrive later
A landed cost model that stops at the warehouse door misses the tail. Cross-border returns are expensive to process and the duty on a returned unit is not automatically refundable; most authorities offer relief for goods re-exported in the same state, and claiming it means a procedure and a deadline rather than a request.
Damage and shortage are the other tail. Duty is assessed on what was declared, so a shortfall discovered after clearance is a claim against the carrier or the insurer rather than a reduction in the bill. Building a small allowance for both into the unit cost is more honest than treating them as exceptions, because at volume they are not exceptional.
A worked example
Bicycles into Canada, showing the part of the landed cost that is set by the tariff rather than by a carrier.
| Goods value on the invoice | 3,500.00 |
| International freight | 240.00 |
| Cargo insurance | 35.00 |
| Value the duty is charged on (FOB basis) | 3,500.00 |
| Duty at 13% | 455.00 |
| Canada tax at 5%, charged on the value plus the duty | 197.75 |
| Total, before commercial charges | 4,427.75 |
| Estimate uses the Canadian value for duty, taken at the place of direct shipment, so freight and insurance to Canada are excluded. Customs Act s.48(5)(b)(i) and CBSA Memorandum D13-3-3: international freight from the place of direct shipment is deducted from the price paid. Rate last verified 2026-08-31. | |
Everything above is knowable before you place the order. The commercial charges on top are the part that needs quoting.
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