What are Landed Costs?

Landed cost in the supply chain refers to the total cost of getting a product from its origin to your customer’s doorstep. It includes all the expenses that might be involved along the way. This covers not just the price of the product itself but also additional charges like shipping, customs duties, taxes, insurance, handling fees and any other costs incurred during transportation and delivery.

Essentially, think of the landed cost as the “full price” of the product, considering every step needed to bring it to your customer’s doorstep. This means it’s not just about the price you see on the invoice but all the behind-the-scenes expenses that ensure the product reaches your customer safely and legally. By considering all these factors, businesses can better understand the true cost of sourcing products and set more accurate prices, ensuring they cover all their bases.

4 factors to consider when calculating Landed Costs in your Supply Chain 

Landed costs include a variety of expenses, some of which are within your control and others that are not. The four key costs that may be directly influenced by your supply chain are:

• Product: Includes costs related to sourcing raw materials, manufacturing, and the profit margin.

• Freight costs: Includes the cost of transporting your products through the entire supply chain. These costs involve origin handling freight costs, customs clearance, destination costs etc. 

• Customs duties, taxes and other regulatory fees: These costs apply to goods that are imported and exported. While these costs are unavoidable, their payment can be delayed when managed through 3PL (third-party logistics) warehouses, that offer deferred payment of duties and taxes until the goods are sold. Mainfreight offers warehouses and expertise internationally to help manage deferred duties for imported goods.

• Insurance Costs: This cost protects your goods from loss, theft and damage, and are variable depending on your level of cover. 

And why do you need to calculate Landed Costs?

Knowing your costs ensures that your business isn't operating at a loss and helps prevent financial surprises. By accurately calculating your Landed Cost, you can effectively analyse costs, make better budgeting decisions, and optimise your supply chain.

How can Mainfreight assist with your Landed Costs? 

Mainfreight can provide clear and accurate import landed costings, covering all costs up and including delivery for each product on your import invoice. This includes duty, GST, freight, and origin and destination charges, based on weight, volume, or value. We can also supply detailed reports that break down these costs for each item on your supplier's invoice, ensuring proper allocation of duties, taxes, and freight. Plus, we can tailor the landed costings to suit your needs, whether that’s through percentage-based analysis, trend insights, or data integration.