Calculating Landed Cost

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landed costs

Calculating Landed Cost

How much does it cost to get products from your suppliers and into your warehouse? It is more than just the price you pay for the products themselves. The true cost of ordering products is called the Landed Cost, and this cost has much more to it than meets the eye. It includes a number of factors, including:

  • Shipping Costs
  • Crating, Packing, and Handling Costs
  • Brokerage and Logistical Fees
  • Taxes
  • Insurance
  • Employee Compensation

International shipments often include the following factors (in addition to the above items). These are a little more complicated, so we’ll explain them in detail:

  • Customs Duties – This is a complicated topic, so buckle up. Duties are basically taxes that you pay on items that are coming into the country. In the United States, you will want to make sure that you brush up on the current law concerning duties that must be paid on imported goods. There are all kinds of regulations regarding what kinds of goods can be exempt from duties if they are purchased in a low enough quantity or if they are intended to be given as gifts. Illicit drugs and other contraband are definitely a no-no, but alcohol and tobacco products can usually be imported without too much trouble.
  • Tariffs – A tariff specifies the actual amount of money that is owed on imported items that fall under the purview of customs duties. It is usually a percentage rate at which certain items (that are legally specified) are taxed.
  • Harbor Fees – Did you know that no ship automatically has the right to dock in another country’s port? Each sovereign nation has the right to refuse incoming shipments if they so wish because it is their land. Incoming ships must pay for the privilege of finding port, and this payment is called a harbor fee.
  • Currency Conversions – This is the rate at which one currency converts into another. Every currency is worth something in relation to every other currency. It could be more or less, meaning that, when converted into another currency, it will be worth a greater or smaller number of the new currency than it was in the other currency. These currency conversions are important to calculate because they will affect the perceived value of goods as they change hands and are sold in new markets.

Not every Landed Cost will necessarily include all of these expenses, but it is important to keep all of them in mind when calculating the true cost of the parts and products you order.

Rather than guessing about these important factors or calculating them by hand each time you place an order, wouldn’t it be nice to have all of that done for you accurately and automatically? Fishbowl calculates everything that goes into your Landed Costs, saving you a lot of time and making sure you know exactly how much you will be spending.

Plus, Fishbowl integrates directly with UPS, so you can compare shipping rates and set up a shipment directly from the Fishbowl interface without having to open a Web browser. Fishbowl is an ideal solution to handle your shipping needs. Click the button below to get a free trial of Fishbowl right now.

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To calculate the landed cost of orders coming into the country from another country, you need to take into account the following fees and factors:

  • Shipping costs
  • Crating, packing, and handling costs
  • Brokerage and logistical fees
  • Taxes
  • Insurance
  • Employee compensation
  • Customs duties
  • Tariffs
  • Harbor fees
  • Currency versions

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