Landed cost

Landed cost is everything it takes to get one saleable unit into your warehouse: the supplier invoice plus currency conversion, freight, insurance, customs duty and inbound handling, spread over the units that actually arrive undamaged. On ordinary import figures it runs close to a fifth above the invoice price.

The gap matters because it sits inside the cost of goods, so understating it flatters every margin, every product ranking and every pricing decision below it. A product bought at 16,00 euro and landed at 19,15 euro reports a 61% margin where the truth is 53%.

Two details cause most of the understatement. Customs duty is charged on the customs value, which normally includes freight and insurance to the border rather than the invoice alone. And the whole shipment's cost has to be carried by the units that arrive saleable, so shrinkage raises the cost of everything that survived.

Import VAT is deliberately excluded for a VAT-registered business, because it is reclaimed; duty is not reclaimable and belongs in. Getting that pair the wrong way round is the commonest error after ignoring freight entirely.