Landed cost: the formula, a worked supplement example and the US import fees to count

Landed cost is the full cost of one unit once it's in your warehouse, ready to sell. Add up everything the shipment cost to get there (the supplier's price, freight and insurance, duty, customs and broker fees, testing and receiving), then divide by the units you can sell. In the example below, a bottle quoted at $4.00 lands at $4.87.

Here's where that $4.87 comes from, for a fictional magnesium capsule made abroad and shipped to a US warehouse by sea:

Where a $4.87 bottle comes from

Illustrative shipment: 5,000 bottles by sea, landed cost per bottle

• Supplier price$4.0082%
• Freight and insurance$0.378%
• Testing and receiving$0.255%
• Duty (5%, a placeholder rate)$0.204%
• Customs fees and broker$0.051%

What goes into landed cost, line by line

Draw the line at the order. Everything you pay to get the goods from the supplier to the shelf where they wait belongs in landed cost; everything you pay after a customer orders doesn't. Picking, packing and postage to the buyer are per-order costs with their own line in your contribution margin, so counting them here would count them twice.

Between the supplier and the shelf, look for six kinds of cost:

• The supplier's price. Per unit, for what you actually receive. Read what the quote includes: a price that stops at the factory or the port leaves the freight to you, while a delivered price already contains it.
• Packaging you buy yourself. Bottles, caps, labels, cartons or inserts you send to the manufacturer are part of the unit, even though they arrive on a different invoice.
• Freight and insurance. The international leg, plus the trip from the port or airport to your warehouse.
• Duty. Generally a percentage of the goods' customs value, at the rate for your product's tariff classification.
• Customs fees and the broker. The Merchandise Processing Fee, the Harbor Maintenance Fee if the goods came by sea, and your customs broker's charges.
• Testing and receiving. Lab tests you pay for on each lot, and what your warehouse charges to check the stock in and shelve it.

Then divide by the units you can sell, not the units you ordered. If 100 of the 5,000 bottles below arrive crushed, the other 4,900 carry the whole bill, and the landed cost rises from $4.87 to $4.97.

How to calculate landed cost: a worked supplement example

Say a supplement brand orders 5,000 bottles of a magnesium capsule from a manufacturer abroad at $4.00 a bottle, filled and labeled. The goods travel by sea to a US port and on to the brand's warehouse. The freight, duty rate, broker, testing and receiving costs are illustrative; the two customs fees use the rates in force as of October 2026:

1. Goods: 5,000 × $4.00 = $20,000.
2. Freight and cargo insurance, port to warehouse included: $1,850.
3. Duty at a placeholder rate of 5% of the goods' value: $1,000.
4. Merchandise Processing Fee: 0.3464% × $20,000 = $69.28.
5. Harbor Maintenance Fee: 0.125% × $20,000 = $25.00.
6. Customs broker: $180.
7. Lab testing of the lot, $750, and receiving at $0.10 a bottle, $500.

The shipment costs $24,374.28 in all, or $4.87 a bottle: 21.9% more than the supplier's price.

Look at the base for the duty and the two fees. It's $20,000, not the $21,850 of goods plus freight, because US customs value is generally the price paid for the goods without the cost of shipping and insuring them to the US (more on that below). In this example the biggest addition is freight at $0.37 a bottle, then testing and receiving at $0.25, then duty at $0.20. The two customs fees and the broker together add about a nickel.

Put your own shipment into the calculator. It starts with the example. Customs fees charged as a percentage of value go in as dollars, together with the broker's fee: $69.28 + $25.00 + $180 = $274.28. The lab test and receiving go in per unit: $750 ÷ 5,000 + $0.10 = $0.25.

Calculator

Landed cost calculator

What one unit really costs once it reaches your shelf: the supplier price plus freight, duty and fees, spread over the shipment.

Supplier price per unit$Units in the shipmentFreight and insurance for the shipment$Duty rate (% of the product value)%Customs, brokerage and other fees for the shipment$Other costs per unit (labels, testing, receiving)$

Landed cost per unit

$4.87

$24,374 for 5,000 units

Above the supplier price

21.9%

Freight and fees per unit

$0.42

Duty per unit

$0.20

Duty is applied to the product value here. Look up your product’s rate in the Harmonized Tariff Schedule; customs fees charged as a percentage of value can be added to the rate, fixed ones go in the shipment fees.

Reset to the example

Now run the brand's first order through it, the one it placed before it knew whether the product would sell: 1,000 bottles by air. Air freight costs $1,400, and there's no Harbor Maintenance Fee, because the goods didn't come by vessel. At $4,000 it's above the $2,500 limit for an informal entry, so it generally needs a formal one, and the Merchandise Processing Fee is its $34.58 minimum: 0.3464% of $4,000 would be only $13.86. Duty and receiving shrink with the order, to $200 and $100, but the broker still charges $180 and the lab still charges $750 for the lot. The same $4.00 bottle lands at $6.66:

One $4.00 bottle, two landed costs

Illustrative shipments, landed cost per bottle

Supplier quote$4.00

Regular order: 5,000 by sea$4.87

First order: 1,000 by air67% above the quote$6.66

So price your offer on the landed cost you'll pay at volume, and plan your launch cash on the one you'll pay first. The first weeks of margin are thinner than the spreadsheet says.

Three ways to split shared costs across products

When a shipment carries more than one product, the shared costs have to be divided between them, and the method you choose changes each product's landed cost. Suppose the brand had put 1,000 shaker bottles, bought at $2.00 each, in the same container as the capsules, for the same $1,850 of freight. The shakers are bulky: they take 40% of the space for 9% of the value. Depending on the method, their freight comes out anywhere from 17 to 74 cents a unit:

Freight per unit under three allocation methods

Illustrative: $1,850 of freight for 5,000 capsule bottles ($4.00, 60% of the space) and 1,000 shakers ($2.00, 40% of the space)

The simplestBy units

Every unit carries the same share.

• Capsule bottle: $0.31
• Shaker: $0.31

Fine when one product fills the shipment, or the products are alike in size and value.

For freightBy space or weight

Each product carries the share of the container it fills.

• Capsule bottle: $0.22
• Shaker: $0.74

Bulky products carry their real share of the freight.

For value-based feesBy value

Each product carries its share of the shipment value.

• Capsule bottle: $0.34
• Shaker: $0.17

Right for fees charged as a percentage of value. Wrong for freight: a cheap, bulky item looks cheaper to ship than it is.

Each method suits a different kind of cost:

• Freight by space or weight. That's what fills the container, so a bulky product should carry its share. Split by value, the shakers would look as if they cost 17 cents each to ship, when they took up two fifths of the container.
• Duty product by product. Each product has its own classification and rate, applied to its own value, so duty isn't a shared cost at all. Give each product its own.
• Value-based fees by value. The Merchandise Processing Fee and the Harbor Maintenance Fee are percentages of value, so split them the same way.

Costs tied to one product, such as the capsule lot's lab test, go to that product only. Whatever you choose, write the method down and use it every time. A landed cost that changes because you changed the method tells you nothing.

The US import fees to count, as of October 2026

Four items decide the customs part of a US landed cost. This is a summary as of October 2026, not customs or legal advice. Rates and rules change, so confirm them with a customs broker before you place an order.

Duty. Generally a percentage of the goods' customs value. US customs value is based on the transaction value first (19 CFR 152.101), and the price paid or payable leaves out the costs of transportation, insurance and related services incident to the international shipment (19 CFR 152.102).

The rate depends on your product's classification in the Harmonized Tariff Schedule, which the US International Trade Commission publishes and you can search at hts.usitc.gov. The schedule changes many times a year: according to the commission's page, Revision 21 of the 2026 schedule was published on October 9, 2026 (USITC). Check the current revision, Chapter 99 add-on duties included, before every order.

Merchandise Processing Fee. On a formal entry it's 0.3464% of the goods' value, with a minimum of $34.58 and a maximum of $670.86 for entries from October 1, 2026 to September 30, 2027. CBP adjusts the minimum and maximum every fiscal year; for fiscal 2027 the rate stayed the same (Federal Register, CBP Dec. 26-14). In practice, a formal entry worth less than about $9,980 pays the minimum, and one worth more than about $193,700 pays the maximum.

Shipments of up to $2,500 can generally use an informal entry, with exceptions (19 CFR 143.21), and pay a flat fee instead: $2.77 for an automated informal entry not prepared by CBP in fiscal 2027. Above $2,500 you generally need a formal entry, and CBP can require one below that too.

Harbor Maintenance Fee. 0.125% of the cargo's value, on commercial cargo loaded on or unloaded from a commercial vessel at a US port (19 CFR 24.24). Ocean shipments pay it. Air shipments don't, because the fee applies to cargo moved by vessel. No cap appears in the regulation.

De minimis. Low-value shipments no longer enter duty-free. The exemption has been suspended for shipments from every country since August 29, 2025, and the law ends it on July 1, 2027 (Federal Register). If you ship orders straight from an overseas supplier to US buyers, those parcels no longer skip duty, so duty belongs in the cost of every order, not only in a container's landed cost. The change came in steps:

The US import changes behind a 2026 landed cost

1. Jul 4, 2025De minimis repeal signed into lawThe One Big Beautiful Bill Act ends the exemption from July 1, 2027.
2. Jul 30, 2025Executive Order 14324Suspends duty-free de minimis treatment for low-value shipments from all countries.
3. Aug 29, 2025The suspension takes effectLow-value shipments from every country lose duty-free treatment.
4. Feb 20, 2026Executive Order 14388Continues the suspension, postal shipments included.
5. Jun 24, 2026CBP interim final rulesAnnounce the indefinite suspension of the exemption in CBP's regulations.
6. Oct 1, 2026Fiscal 2027 customs fees applyMPF on formal entries: 0.3464%, minimum $34.58, maximum $670.86.
7. Oct 8, 2026CBP proposes a Low-Value Shipments ruleFor shipments of $2,500 or less; comments due December 7, 2026.
8. Jul 1, 2027The exemption ends by lawThe statutory termination takes effect.

The October 2026 proposal covers shipments of $2,500 or less. Among other things, it would require type 11 informal entries to be filed on or before the date of importation, require bonds and widen CBP's power to demand a formal entry. It's open for comment until December 7, 2026 and has no effective date yet.

What landed cost does to your margin and break-even ROAS

Every margin you calculate starts from the product cost, so an understated landed cost overstates everything after it. Take the brand's three-bottle offer at $147, with $9 to ship each order, 4% payment fees and 6% of revenue lost to refunds:

• On the supplier's price, three bottles cost $12.00, the order leaves $111.30 before ads, and break-even ROAS is 1.32x.
• On the landed cost, they cost $14.62, the order leaves $108.68, and break-even ROAS is 1.35x.
• On the first, air-freighted shipment, they cost $19.99, the order leaves $103.31, and break-even ROAS is 1.42x.

For a high-margin supplement the gap at volume looks small: $2.62 an order. But it's profit your reports show and your bank account never sees, more than $2,600 for every thousand orders. On a product whose cost is a large share of its price, the same mistake can make a losing campaign look profitable. The break-even ROAS post has a calculator for the rest of the order; put your landed cost in its product-cost line.

The fix has to reach your reports, not only your spreadsheet. In RevvyScales, profit tracking (Growth plan and up) takes your product costs, gateway fees and the ad spend from a connected Meta account off your revenue. Enter the landed cost per unit as the product cost, not the supplier's price, or every profit figure inherits the gap (product costs).

Landed cost mistakes that flatter your margins

Most landed cost errors make a product look cheaper than it is, so they show up as profit that never arrives. Using the supplier's price as the product cost is the biggest, and the section above puts a number on it. Three more are easy to miss:

1. One shipment's cost, forever. Each shipment lands at its own cost. When a new one arrives, blend it with the stock you still hold: 2,000 bottles at $4.87 and 5,000 new ones at $5.10 average $5.03.
2. Duty in the wrong place. Leaving it out because the broker billed it on a separate invoice understates the cost. Working it out on goods plus freight overstates it: $1,092.50 instead of $1,000 on the example shipment.
3. Fixed costs spread too thin. The broker and the lab test cost the same on 1,000 bottles as on 5,000, and a small formal entry still pays the $34.58 MPF minimum. Only the units that arrive in sellable condition share those costs, not every unit you ordered.

If you're still choosing a manufacturer, compare landed costs rather than quotes: a lower unit price from farther away can land at a higher cost. The private label supplements post lists the questions to ask a supplier, and once you know your landed cost per bottle, the bundle pricing post shows how to build one-, three- and six-bottle prices on top of it.

Before your next purchase order

Run through these before you sign the next order, and again when the goods arrive:

Before your next purchase order

• Ask the supplier what the quote includes and where their price stops
• List every cost from their door to your shelf: freight, insurance, duty, customs fees, broker, testing, receiving, packaging you supply
• Look up the duty rate in the current HTS revision, and confirm the classification with your broker
• Work out duty and the value-based fees on the goods' value, without the international freight and insurance
• Use the MPF amounts for the fiscal year of entry: $34.58 minimum and $670.86 maximum from October 1, 2026
• Split freight by space or weight, duty product by product and value-based fees by value
• Divide by the units you can sell, after damage and failed tests
• Update the product cost in your profit reports and your break-even ROAS when the shipment lands

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