{"id":14763,"date":"2022-11-28T08:38:56","date_gmt":"2022-11-28T16:38:56","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dcl-v3\/?p=14763"},"modified":"2023-10-10T17:04:16","modified_gmt":"2023-10-11T00:04:16","slug":"estimate-total-landed-costs","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dcl-v3\/blog\/supply-chain\/estimate-total-landed-costs\/","title":{"rendered":"How to Estimate Total Landed Costs"},"content":{"rendered":"

If you plan to fly or ship your products all the way to another country, it\u2019s important to make sure you understand the customs fees that will apply. <\/span>International shipping<\/span><\/a> is complex enough\u2014no one wants surprise extra fees, especially if you\u2019re launching into a new market.\u00a0<\/span>\u00a0<\/span><\/p>\n

It can be a big advantage for brands to get an accurate estimate of their total landed cost. Here are a few reasons:\u00a0<\/span>\u00a0<\/span><\/p>\n

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  1. Don\u2019t lose money on shipments.\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n
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    1. Easier to factor customs fees into your overall product cost for international customers.<\/span>\u00a0<\/span><\/li>\n<\/ol>\n
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      1. Eliminate surprise fees after you start shipping and selling.\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n

        Here are the major factors that affect total landed cost, some obvious ones, and some that are often overlooked.\u00a0<\/span>\u00a0<\/span><\/p>\n

        Insider insight: International shipping can be confusing and overwhelming, here\u2019s a glossary of <\/span>common international shipping terms<\/span><\/a> and their definitions.\u00a0<\/span>\u00a0<\/span><\/p>\n

        What is Total Landed Cost?<\/span><\/b>\u00a0<\/span><\/p>\n

        Landed cost<\/span><\/a> 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.\u00a0<\/span>\u00a0<\/span><\/p>\n

        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\u2019re likely to lose money on international shipments. When importing into a new market, it\u2019s crucial to get an <\/span>accurate estimate of all fees and costs<\/span><\/a> so this doesn\u2019t happen.\u00a0<\/span>\u00a0<\/span><\/p>\n

        “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.\u201d \u2014Tom Taggart, Head of Global Trade at Passport Shipping<\/span>\u00a0<\/span><\/p>\n

        How to Calculate Total Landed Cost<\/span><\/b>\u00a0<\/span><\/p>\n

        To calculate landed cost, add the cost of a product, shipping, customs, risk, and overhead expenses. The sum is the total landed cost.<\/span>\u00a0<\/span><\/p>\n

        Landed cost = product + shipping + customs + risk + overhead<\/span>\u00a0<\/span><\/p>\n

        Manually calculating landed cost can be time consuming and error prone. The more products you ship, the more complex the formula becomes. There are many tools that can automate this for you, they may also have updated information to factor in freight rates, insurance, and other expenses to ensure quickly and accurately.\u00a0<\/span>\u00a0<\/span><\/p>\n

        Here\u2019s an example of how total landed cost should be calculated.\u00a0<\/span>\u00a0<\/span><\/p>\n