The formula
Landed cost = product price + international freight + insurance + import duty + customs fees + local delivery + handling.
Importers who price from the factory quote alone routinely discover their margin was an illusion.
A worked example: 500 units from Shenzhen to Jeddah
Component Amount (USD) % of total
--- --- ---
Product (500 × $8) 4,000 52%
Sea freight (LCL) 900 12%
Insurance (0.3%) 15 0%
Import duty (5%) 246 3%
VAT on import (15%) 774 10%
Customs broker + port fees 380 5%
Local delivery 220 3%
Total landed 6,535 85%
The remaining 15% is your margin buffer — before your own costs.
Where the money actually goes
:::chart Cost split of the example shipment
Product | 4000
Freight + insurance | 915
Duty + VAT | 1020
Fees + delivery | 600
:::
Three rules
- Quote in the same Incoterm when comparing suppliers — an EXW price and a CIF price are not comparable.
- Know your HS code before you negotiate — duty rates change the math completely.
- Add 5–8% contingency for exams, storage, and currency movement.
> The cheapest factory price often produces the most expensive landed cost.
Prebro does the math with you
Prebro deal rooms break the total into product, freight, and fees, and the freight marketplace lets you attach a real shipping quote to the deal — so your landed cost is calculated, not guessed.