Landed cost: freight, duties & the costs everyone forgets
The supplier's price is what it costs to make a unit, not what it costs to get it onto your shelf. That gap is where importers quietly lose margin.
AI can compute landed cost per unit and even look up current duty rates. But you supply the shipment facts.
It must verify the duty rate, not assume it, because rates change by product and country.
Fastest path: one prompt, end to end
🤖 AI prompt — paste into ChatGPT / Claude
You are an import cost analyst. Use MY numbers only (invent nothing).
Supplier unit cost: [$] for [# units]
International freight for the shipment: [$]
Product description (for duty lookup): [what it is, material, use]
Import/destination country: [country]
Export country (origin): [country]
Brokerage/customs clearance fee: [$]
Cargo insurance: [$]
Currency: paid in [currency], selling in [currency]
Do this and show the arithmetic:
1. Open a current duty/tariff source for [destination country] (e.g. the country's customs tariff site) and read the real duty rate for this product from [export country]. Do NOT guess the rate; if you cannot browse, leave duty blank and tell me which tariff tool to check.
2. Allocate freight, brokerage and insurance per unit (by unit count; if items differ a lot, allocate by weight or volume and say which).
3. Duty per unit = (supplier cost + allocated freight) x duty rate, unless the destination assesses duty differently; state your assumption.
4. Add a currency buffer (default 2 to 3%) on the FX-exposed portion.
5. Landed cost per unit = supplier cost + freight/unit + duty/unit + brokerage/unit + insurance/unit + FX buffer.
If a number is missing, ask; do not guess.
Output: a per-unit landed-cost table with each line + the duty rate WITH its source + total landed cost per unit.
Or do it in 5 steps
- Start from the true supplier cost per unit, at the quantity you actually ordered (MOQ pricing, not the sample price).
- Allocate freight across the shipment. Divide international freight by the units in the container. If items differ a lot in size or weight, allocate by weight or volume instead of a flat per-unit split, that is more honest.
- Find the real duty rate, do not assume it. Duty depends on the product classification AND the origin-to-destination country pair, and rates change. Look it up on the destination country's customs tariff site for your specific product and origin; if you cannot verify it, leave it blank rather than guess.
- Add brokerage, clearance and insurance per unit. Customs brokerage, clearance fees and cargo insurance are real per-shipment costs, spread them over the units.
- Add a currency buffer, then total. If you pay in one currency and sell in another, add 2 to 3% on the exposed portion for FX drift, then sum every line into landed cost per unit.
Worked example (labeled): Supplier $10/unit x 1,000 units = $10,000. Freight $2,500 / 1,000 = $2.50/unit. Duty rate looked up at 6.5% on (10 + 2.50) = $0.81/unit. Brokerage + insurance $400 / 1,000 = $0.40/unit. FX buffer 2.5% on the $10 supplier cost = $0.25/unit.
Landed cost = 10 + 2.50 + 0.81 + 0.40 + 0.25 = $13.96/unit, 40% above the "$10 product." Numbers illustrative; verify your own duty rate.
For cross-border sellers importing or exporting, landed cost is the real floor for pricing. Recompute it per shipment, freight and FX move, and bring the result into contribution-margin.