How to Calculate True Landed Cost in 2025
Your profit margin isn’t just (Sale Price – Manufacturing Cost). If you aren’t factoring in the “hidden” costs, you are likely losing money on every order.
The "True COGS" Formula
Most beginners think COGS is just the price they pay their factory. Advanced retailers know that the “Landed Cost” is the only number that matters. Here is the formula:
Factory Cost + Shipping + Duties + Insurance + 3PL Handling =
Landed Cost
The Step-by-Step Calculation
1. Factory Cost: The base unit price you pay to produce the item.
2. Freight & Shipping: Don’t just look at the total wire transfer. Divide your total shipping bill by the number of units in that specific container to get the per-unit shipping cost.
3. Customs & Duties: These vary by product category (HS Codes). Ensure you allocate these specific taxes back to the SKU level.
4. 3PL & Prep: If your warehouse charges $1.50 to receive and prep each unit, that is part of your COGS, not your general overhead.
The Hard Way vs. The EcomKeeper Way
Doing this manually in Excel takes hours every week and is prone to human error. One wrong decimal point can make a profitable SKU look like a loser (or vice versa).
**EcomKeeper’s Inventory IQ** automates this entire stack. We pull your shipping invoices and duty bills, automatically allocating those costs to your inventory assets. You get a real-time “Unit Economics” dashboard showing your true margin on every single order.