Free calculator
Landed cost calculator
What a unit really costs to own: the invoice, plus the currency, the freight, the duty on the customs value, the handling, and the units that arrive too damaged to sell.
A landed cost calculator turns a supplier invoice into the real cost of owning one unit: currency conversion, freight, insurance, customs duty on the customs value, inbound handling, and the shrinkage that means fewer units arrive saleable than were shipped.
The shipment
Getting it here
Freight and insurance are part of the customs value, so duty is charged on them too.
Landed cost, per saleable unit
€19,15
19,7% above the €16,00 on the invoice. This is the figure that belongs in your cost of goods, and the invoice price is the figure most stores put there instead.
Invoice price
€16,00
what the supplier charged
17Landed
€19,15
what it really cost
Saleable units
882
of 900 shipped
Import VAT is deliberately absent: a VAT-registered business reclaims it, so including it would overstate the cost of goods on every statement this feeds. Duty is not reclaimable, which is why it is in.
Price every order at its real costThe formula
The invoice price is the smallest part of the answer
Almost every store types the supplier’s invoice price into its cost field and moves on. On ordinary import figures that understates the real cost by close to a fifth, and since the error is inside the cost of goods it flatters every margin, every product ranking and every pricing decision below it.
Two details do most of the damage when they are missed. Customs duty is charged on the customs value, which in the EU normally includes the freight and insurance to the border, not on the invoice alone. And the whole shipment’s cost has to be carried by the units that actually arrive saleable, so shrinkage raises the cost of everything that survived.
Import VAT is deliberately excluded. A VAT-registered business reclaims it, so putting it in the cost of goods would overstate the cost of every unit for the sake of money that comes back. Duty is not reclaimable, which is exactly why it belongs.
Line 17 on a nouz P&L is the cost of goods, and this is the number that belongs in it.
Where it goes wrong
Four costs that quietly stay out of the cost of goods
Each one is invisible in the product record and entirely visible in the bank account.
Duty computed on the invoice
Freight and insurance are usually part of the customs value, so duty is charged on a bigger base than the goods alone. The gap grows with freight rates, which means the error is largest in exactly the periods when margins are already under pressure.
Freight treated as an overhead
Booking freight to a general expense line keeps it out of the cost of goods, which makes the gross margin look healthy while the operating profit quietly absorbs it. Freight belongs to the units it carried, not to the month it was invoiced in.
Currency conversion ignored
Paying an invoice in another currency costs the exchange spread and often a transfer fee. It is one or two percent that never appears on the supplier’s document, so it never reaches the cost record either.
Shrinkage spread over the wrong units
If 2% of a shipment arrives broken, the surviving 98% has to carry the entire freight and duty bill. Dividing by the units ordered rather than the units sellable understates the cost of every one you actually sell.
Worked example
A €16,00 invoice price, landed
The calculator’s defaults: 900 units at €16,00, paid in a foreign currency at a 1,5% spread, €1.200 of freight, €90 of insurance, 4,7% duty, €240 of inbound handling and 2% shrinkage on arrival.
The customs value comes to €15.906, duty adds €747,58, handling €240, and 882 of the 900 units arrive saleable.
A €16,00 invoice price becomes €19,15 in the warehouse, 19,7% higher. Note the first row: even the goods line is €16,33 rather than €16,00, because the 900 units bought have to be paid for by the 882 that can be sold.
On a product selling at €41,18 net, using the invoice price reports a 61,1% margin where the truth is 53,5%. That is the gap that makes a product look worth advertising when it is not.
Questions
Landed cost, answered
What is landed cost?
Everything it costs to get one saleable unit into your warehouse, not just what the supplier invoiced. Freight, insurance, duty, currency conversion, handling and the units that arrive broken all belong in it, and on ordinary figures they add roughly a fifth to the invoice price.
What is customs duty charged on?
The customs value, which in the EU is normally the goods plus the freight and insurance to the border, not the invoice alone. Calculating duty on the invoice price understates it on every shipment, and the gap grows with freight, which is exactly when a margin can least afford the surprise.
Should import VAT be in the landed cost?
No, for a VAT-registered business: import VAT is reclaimed, so putting it into the cost of goods overstates every margin below it. Duty is different because it is not reclaimable, which is why it belongs in. If you are not VAT-registered the answer changes, and that is a question for your accountant.
Why divide by the units that arrive rather than by the units shipped?
Because the shipment's whole cost has to be carried by the stock you can actually sell. If 2% arrives damaged, the surviving 98% inherits their share of the freight and duty, which raises the true cost of everything you sell from that shipment. Ignoring shrinkage quietly flatters the cost of goods.
How often should I recompute it?
Every shipment, because the inputs move independently: freight rates swing hard, currencies drift, and duty rates change with classification and trade agreements. Two shipments of the identical product months apart routinely land at different costs, which is why cost history matters more than a single cost field.
More calculators
Four more, all free, all built on the same statement.
Want the long version rather than the arithmetic? The limits of Shopify's COGS reports.
The terms this calculator uses:
The cost that was true on the day the order shipped
nouz stores unit costs with effective dates, so a shipment that landed dearer than the last one prices the orders that came after it and never rewrites the ones before.