Total landed cost per unit — product + inbound shipping + duties + packaging + handling. The number you should price from.
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Total landed cost is the full per-unit cost of getting a product from your supplier to your customer — including inbound shipping, duties, outbound shipping, packaging, and handling. It's the number you should base all pricing decisions on, not just COGS.
Most beginners price from COGS alone. That ignores inbound freight, duties, packaging, and handling — costs that can add 20–40% to your real cost basis. Pricing from COGS leads to underpricing and thin margins.
Landed cost = product cost + inbound shipping + duties + outbound shipping + packaging + handling
| Component | Value |
|---|---|
| Product cost | $15.00 |
| Inbound shipping | $0.00 |
| Duties | $0.00 |
| Outbound shipping | $5.00 |
| Packaging | $0.80 |
| Handling | $0.00 |
| Landed cost | $20.80 |
| Annual (100 orders/mo) | $24,960.00 |
Compare to $15.00 COGS-only. The $5.80 difference (38% of COGS) is real money. If you priced from COGS alone, you'd be undercounting costs by 29% per unit.
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