Landed cost resource hub

Landed Cost: Definition, Formula, and Practical Guides

Landed cost is the total cost of getting purchased goods to their destination, including the product cost and applicable freight, insurance, customs duties, handling, inland transport, and other fees.

What is landed cost?

Landed cost combines the purchase cost of goods with the additional costs required to move, clear, and receive them at the destination. The included components depend on the shipment, trade terms, and accounting policy.

Landed cost formula

Total landed cost = product cost + freight + insurance + customs duties + port handling + inland transport + other fees

Landed cost per unit = total landed cost ÷ units received

Use actual applicable charges when they are known, and keep estimates clearly identified until final invoices arrive.

Illustrative example

If 100 units have a product cost of $1,000, freight of $150, insurance of $25, duties of $100, handling of $50, and inland transport of $75, the total landed cost is $1,400 and the landed cost per unit is $14.

How OLT Solutions records landed cost

OLT Solutions can capture landed-cost buckets during goods receipt and allocate them across receipt lines by value, quantity, weight, volume, or container fit before recording a per-unit landed cost with inventory.

Where the allocation actually gets recorded

The formula above becomes a stored per-unit cost in two OLT surfaces: the receipt that allocates the buckets, and the shipment record the charges come from.