The supplier's unit price is only one part of the cost of bringing stock into your selling market. Landed cost combines the purchase price with the expenses needed to move and receive the goods at an agreed destination. For marketplace sellers, resellers and wholesalers, it is a useful starting point for pricing and reorder decisions.
Build two views of every shipment: cash you may need to pay and the cost you expect to carry after any eligible tax recovery. These numbers can differ. Your actual customs charges, tax treatment and payment dates depend on the goods, importer, route and destination rules.
What to Include in a Landed Cost Estimate
| Cost line | Information to obtain | Keep separate because |
|---|---|---|
| Goods | Supplier invoice, quantities, unit prices and currency | A discount or quantity change alters the base purchase cost |
| Origin collection and handling | Supplier delivery terms, pickup, receiving or export handling quote | The supplier may pay some origin charges under the agreed terms |
| International freight | Mode, weight and dimensions, chargeable basis, route and quoted service | Actual measurements or a changed service can alter the charge |
| Insurance, if purchased | Agreed cover and premium | It may be optional or priced separately |
| Customs duty and other product levies | Product classification, manufacturing origin, value and destination review | The applicable treatment varies by product and country |
| Import processing and broker charges | Provider quote and scope | These are service charges, distinct from government duties and taxes |
| Import VAT or GST | Estimated tax and the importer responsible | Cash payment and possible recovery must be assessed separately |
| Delivery to the receiving point | Business, shop, warehouse or marketplace handover quote | The endpoint, booking and handling needs can change the cost |
Add only charges that apply to your transaction, and record who pays each one. A supplier price that already includes an agreed delivery leg should not cause that leg to be counted twice. Distinguish the country where you buy from the goods' manufacturing origin when preparing a customs estimate.
Calculate Cash Outlay and Cost per Saleable Unit
For a simple single-product shipment, use this planning method:
- Add the goods price and every applicable charge through delivery to the agreed stock receiving point.
- Include import taxes in the cash estimate when your scenario assumes they are actually paid at that stage. If the tax is accounted for through a return, deferred or paid by another party, show that timing separately.
- Identify any import VAT or GST that your accountant confirms is recoverable by the relevant importer. Subtract only that eligible amount when estimating the net economic cost for pricing.
- Divide the resulting cost by the number of saleable units received. Damaged, missing or unsaleable units can increase the cost borne by the remaining stock.
Cash paid through receipt = goods + applicable origin costs + international freight + insurance + duty + import handling + import tax actually paid + delivery to the receiving point.
Planning cost after eligible tax recovery = cash paid through receipt − recoverable import tax included in that cash figure.
These are planning figures. Your accountant determines the treatment of inventory, tax credits and other expenses in your records. A recoverable tax amount can still affect cash flow while you wait to claim or offset it.
Worked Example: 100 Units for Resale
Illustrative example, dated 2 November 2026. All amounts below are invented USD planning assumptions, not ShipaX rates or a calculation of duty or tax in any particular country. Assume one product, 100 units purchased and received in saleable condition. In this example, the importer pays the stated import tax before stock is ready.
| Assumed cost | Shipment amount | Per unit across 100 saleable units |
|---|---|---|
| Goods: 100 × $10 | $1,000 | $10.00 |
| Origin collection and handling | $100 | $1.00 |
| International freight | $300 | $3.00 |
| Insurance | $30 | $0.30 |
| Estimated customs duty | $60 | $0.60 |
| Import processing and broker charges | $80 | $0.80 |
| Assumed import tax paid | $78 | $0.78 |
| Delivery to stock receiving point | $100 | $1.00 |
| Cash paid through receipt | $1,748 | $17.48 |
If the importer is entitled to recover all $78 of the assumed import tax, the planning cost after that recovery is $1,670, or $16.70 per saleable unit. If none is recoverable, the planning cost remains $1,748, or $17.48 per unit. If recovery is partial, the result sits between those figures.
The example provides the duty and tax as inputs. It does not imply that $60 duty or $78 tax follows a common percentage or taxable-value formula in the UAE, Saudi Arabia and Australia. Get the actual classification, customs valuation, rate, exemptions and tax treatment reviewed for the destination before relying on a live estimate.
If four of the 100 imported units are unsaleable and the same $1,670 planning cost is carried by the remaining 96 units, the planning cost rises to approximately $17.40 per saleable unit. Record a shortage or damage claim separately rather than assuming recovery.
Why Cash Paid and Economic Cost Can Differ
Import VAT or GST is not automatically a permanent cost, and it is not automatically recoverable. The result depends on who imports the goods, tax registration, how the goods are used, the destination rules and the supporting records. Timing also differs: import tax may be paid at the border, deferred, or accounted for through a return under an applicable arrangement.
For example, the UAE Federal Tax Authority describes a reverse-charge mechanism for imports by VAT-registered recipients, while non-registered recipients generally pay import VAT before release. Saudi Arabia's ZATCA describes conditions for deducting input VAT on imported goods. In Australia, an eligible registered importer may claim GST credits on a creditable importation. These are reasons to verify your own position, not assumptions to apply to every shipment.
Keep three fields in your cost sheet: tax assessed, tax paid now, and tax expected to be recoverable. Ask your tax adviser to verify the last field. If another party is the importer of record or pays the import tax, confirm the contract and tax records before assuming you can claim a credit.
Allocate Shared Costs Across Different SKUs
A mixed shipment needs a consistent method to spread freight and handling across products. Avoid dividing every shared charge equally when items have very different sizes or values.
| Shared cost | Possible allocation basis | Check before using it |
|---|---|---|
| International freight | Chargeable weight, volume or actual carrier pricing by line | Does the basis reflect what drives the transport bill? |
| Insurance | Insured value by SKU | Are all products covered under the same terms? |
| Fixed broker or processing fee | Lines, quantity or value, using a documented method | Is the method reasonable and applied consistently? |
| Destination delivery | Cartons, pallet space or the provider's itemised charges | Are some SKUs sent to different receiving points? |
| Duty and product-specific taxes | Calculated separately for each relevant product line | Do not spread one product's duty treatment onto another |
For each SKU, add its purchase cost, allocated shared charges and its own applicable duties and non-recoverable taxes. Divide by the saleable units of that SKU. Save the assumptions with the calculation so you can update it after the final freight invoice and import documents arrive.
Costs to Keep Outside the Inbound Calculation
The landed estimate above stops at the agreed stock receiving point. To test the profit on a sale, add costs that happen afterwards: marketplace referral fees, storage, picking and packing, customer delivery, returns, payment fees, advertising and any expected discounts. Show sales taxes charged on customer orders separately in your revenue and tax model.
A simple comparison is:
Indicative contribution per sale = selling price − landed cost per saleable unit − per-order fulfilment and selling costs.
Check what a quote actually includes. A shipment ending at a business warehouse and one ending at a marketplace fulfilment centre can have different appointment, labelling, unloading or delivery charges. See Business Shipping Costs and What Your Quote Includes for the charge lines to request.
Information to Prepare for a Quote
Send ShipaX your supplier country, actual dispatch point, destination and delivery endpoint. Include the commercial invoice or product values, SKU descriptions, quantities, manufacturing origins if known, and carton weights and dimensions. Explain whether the stock is going to your business, a retail shop, a third-party warehouse or a marketplace facility.
Ask for the quote to distinguish the confirmed transport and handling charges from estimated government charges, and to identify the payer and payment trigger for each. If goods or paperwork need further review, use provisional cost assumptions until the scope is confirmed.
Frequently Asked Questions
Usually not. Add the applicable transport, handling, import and delivery charges needed to bring the stock to its receiving point. Avoid adding a cost twice if it is already included in the supplier's agreed price.
Show it in the cash and tax schedule when it is assessed or paid. For pricing, treat it as a permanent cost only to the extent it is not recoverable for the actual importer. Ask a qualified adviser to confirm the treatment and timing.
No. Record duty, other applicable levies, import tax and broker or processing fees on separate lines. The calculation and payment rules differ by destination and goods.
Use the number of saleable units received for a practical resale estimate. Track missing or damaged stock and any potential claim separately. In a mixed shipment, calculate each SKU rather than relying on one average for all products.
A useful estimate needs the product, route, shipment measurements, importer and delivery endpoint. A shipping quote should identify confirmed service charges and any provisional customs or tax assumptions. Final amounts can change when the shipment facts or assessed charges differ.