E-Commerce & Product Sellingintermediate
Landed Cost
Definition
The total cost of a product by the time it arrives at your door or warehouse, including product cost, shipping, customs duties, taxes, and insurance.
Why it matters
Founders who price based on supplier unit cost alone are underpricing. Landed cost is the true baseline for calculating profit margins.
Example
Your supplier charges £5 per unit. Add £0.80 freight, £0.30 customs duty, and £0.20 insurance. Landed cost = £6.30. If you sell for £20, your gross margin is 68.5%, not 75%.
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