Landed cost on China imports: how to estimate it before you order
Costs & pricing · Updated
Landed cost is the total cost to get a product from the supplier in China to your door in the US, ready to sell. It is the number that actually decides your margin, and it is the number most first-time importers underestimate.
Here is what goes into it and how to estimate it before you place an order.
Key takeaways
- --Landed cost includes goods price, freight, import duty, customs and broker fees, and last-mile delivery.
- --On a $4,000 goods order with typical freight and duty, the landed cost can run 46% above the goods price alone.
- --Duty is a percentage of goods value set by the HS code, so confirming the correct code matters for cost estimates.
- --Freight surcharges and separate customs invoices are where most landed cost surprises come from.
- --An all-in freight quote that bundles freight, customs, broker, and delivery removes the variability.
- --Landed cost must be confirmed before placing an order so margins are set against the real number, not the goods price.
What landed cost includes
- Goods cost: the supplier's price for the products.
- Freight: air or sea, from the China pickup to US delivery.
- Duty: a percentage of the goods value, set by the HS code.
- Customs and broker: the entry filing and handling.
- Last-mile delivery: from the US port or airport to your address.
A worked example
Say you buy $4,000 of goods, ship 120 kg by air at $10 per kg ($1,200), and your product carries a 10% duty ($400). Add roughly $250 for customs, broker, and delivery. Your landed cost is about $5,850, or 46% over the goods price.
That 46% is the number you price against, not the original $4,000. Skip it and a product that looked profitable can sell at a loss.
How to keep it predictable
The freight and handling side is where surprises usually come from: fuel surcharges, port fees, and a separate customs invoice after delivery. An all-in quote that bundles freight, customs, broker, and delivery into one price removes that variability, leaving only the goods cost and duty to confirm up front.
How to use your landed cost to make better buying decisions
When you get quotes from two suppliers in China, the cheaper goods price does not always mean the cheaper landed cost. A supplier in a different city or with different packaging dimensions changes the freight number. Run the full landed cost -- goods, freight, duty, broker, and delivery -- for each option before deciding. The supplier with a higher unit price can easily win on total cost once freight and duty are added.
Before placing an order, set a maximum landed cost per unit that still works at your target margin. Then work backward: subtract the freight estimate, duty rate, and handling cost from your maximum to get the goods price ceiling. If a supplier's quote exceeds that ceiling, you already know before committing, rather than discovering the problem after the goods are in transit.
When tariff rates change -- as they did multiple times between 2018 and 2026 -- the landed cost of an existing product can jump without any change to the supplier price or freight rate. A product that cleared customs at 7.5% duty may now face 50% on the same goods. Re-run your landed cost calculation whenever duty rates change, especially before reordering a product you have not imported recently.
FAQ
What is landed cost?
Landed cost is the total cost to get a product from the supplier to your door ready to sell: goods, freight, duty, customs and broker fees, and last-mile delivery. It is the real cost you should price your margin against.
How do I estimate import duty?
Duty is a percentage of the goods value, set by your product's HS code. Confirm the HS code and its duty rate before ordering, then multiply by the goods value to estimate the duty portion of your landed cost.
How can I make landed cost predictable?
Get an all-in freight quote that bundles freight, customs, broker, and delivery into one price. That removes the usual surprises (fuel surcharges, port fees, a separate customs bill), leaving only goods cost and duty to confirm up front.
How does a tariff change affect my landed cost?
Tariff changes can significantly raise your landed cost even when the goods price and freight rate stay the same. For example, if your product moves from a 7.5% Section 301 rate to a 25% rate, the duty component of your landed cost more than triples. This is why recalculating landed cost whenever duty rates change is essential, especially before reordering a product. Always run the full landed cost calculation against the current HTS rate for your product, not the rate you paid on a previous shipment.
What is the difference between FOB and EXW for landed cost calculation?
FOB (Free on Board) means the supplier is responsible for getting the goods to the named port of export and loading them onto the vessel. EXW (Ex Works) means you are responsible for everything from the supplier's premises. When calculating landed cost, an EXW price requires you to add the cost of inland transportation from the factory to the port, export fees, and any local handling before the ocean or air freight starts. An FOB price already includes those origin costs. Make sure you are comparing prices on the same basis before choosing a supplier.
Does declared value affect how much duty I pay?
Yes. Import duty in the US is calculated as a percentage of the customs value, which is typically the transaction value (what you actually paid for the goods). A higher declared value means more duty. Undervaluing goods to reduce duty is customs fraud and can result in penalties, seizure, and denial of future entry. Declaring the actual transaction value is both required and important for accurate landed cost planning.
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