How to Estimate Total Landed Costs

If you plan to ship your products internationally (via air or ocean freight), it’s important to make sure you understand the customs fees that will apply. International shipping is complex enough—no one wants surprise extra fees, especially if you are launch products into a new market.  

It can be a big advantage for brands to get an accurate estimate of their total landed cost. Here are a few reasons:  

  1. Don’t lose money on shipments.  
  2. Easier to factor customs fees into your overall product cost for international customers. 
  3. Eliminate surprise fees after you start shipping and selling.  

Here are the major factors that affect total landed cost, some obvious ones, and some that are often overlooked. 

Insider insight:

International shipping can be confusing and overwhelming, here’s a glossary of common international shipping terms and their definitions.

What is Total Landed Cost? 

Landed cost is the sum of all fees incurred when importing products internationally. It often refers to taxes, duties, and customs fees, but it includes more than that.  

There are many reasons shippers need to have an accurate estimate of their total landed costs, but the most important is to accurately price their merchandise for consumers. If you underestimate your total landed costs, you’re likely to lose money on international shipments. When importing into a new market, it’s crucial to get an accurate estimate of all fees and costs so this doesn’t happen.  

“It is really valuable to know what to charge your customer at checkout, and part of that is getting your landed cost estimate right. This helps relieve any surprise invoices 30 days later when you may realize that you shipped an unprofitable shipment.”

Tom Taggart Head of Global Trade at Passport Shipping