Landed Cost
The true total cost of a product including purchase price, shipping to your warehouse, duties, and handling.
Definition
Landed cost is the complete cost of getting a product from supplier to your warehouse — including product cost, international shipping, customs duties, import taxes, and any domestic handling or storage fees before the product is available to sell.
Why It Matters for Shopify Brands
Many founders underestimate landed cost — calculating profitability only on product cost. When duties and freight are factored in, gross margins can be 5–15% lower than expected, fundamentally changing unit economics.
Benchmarks
International sourcing from Asia to North America: landed cost typically adds 15–35% to the factory price. Always calculate profitability on landed cost, not factory price.
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