Many beginners forget to calculate landed cost.

This is a very common mistake when starting an online business.

What is landed cost?

Landed cost is the total cost of getting your product to your warehouse.

Not just the product price from the supplier.

Example 1 — Small order (express shipping)

You buy a small wooden box from China.

Supplier price: US$1.5 per piece (EXW price).

If you order 500 pcs and ship by express, your total cost includes:

• Product cost (EXW price)
• Express shipping
• Import tax or duty

All of these together make your landed cost.

Example 2 — Large order (sea shipment)

You order 5000 pcs.

Shipment goes by sea to your nearest port.

Trade term is FOB.

Your landed cost includes:

• Updated FOB product price
• Ocean freight
• Insurance
• Customs clearance fees
• Import duty and tax
• Local transport from port to warehouse

Key point

The supplier price is never your real cost.

Your real cost is the final amount you pay to receive the goods ready for sale.

That is your landed cost.