Landed cost is product plus freight plus insurance plus duties and taxes plus brokerage and handling. Each line is simple. The product cost is the invoice. The freight is the ocean or air charge. The insurance is the cargo premium. The duties are the rate on the customs value. The brokerage is the entry fee. The handling is everything that happens to the goods between the port and the shelf.
CIF is the part people quote as if it were the whole thing. Cost, insurance, and freight is product plus freight plus insurance, and it stops at the port. It does not include the duty, the brokerage, or the handling. A buyer who prices from CIF is pricing from a number that is missing a third of the cost.
Handling is the terminal handling charge, the drayage from the port to the warehouse, the chassis fee, the warehouse receiving fee, and the storage that accrues while the container waits. None of these is large on its own. Together they are the line that breaks the margin, because they are the charges that arrive after the freight is paid, on invoices the buyer never saw when the order was placed.
The reason handling gets forgotten is that it is not on the supplier's invoice and it is not in the freight quote. It lives in the port's tariff and the drayer's rate sheet, and it only appears when the container lands. A buyer who builds the landed cost from the supplier invoice and the freight quote has built a number that is missing the last mile, and the last mile is where the money goes.
Cargo insurance typically runs 0.3 to 0.5 percent of the value, which looks trivial until it is charged on every shipment for a year. Brokerage typically runs 150 to 500 dollars per entry, which looks trivial until a brand files fifty entries a month. The small lines are small individually and large in aggregate, and the aggregate is the number that matters.
The fix is a template, not a memory. Build the landed cost sheet once, with every line on it, and use it for every product. The template is the control. A buyer who builds the number from memory will forget a line. A buyer who fills in a template will not, because the line is on the page staring at them.
The formula has a second use, and it is the more important one: it tells you when a product does not work. A product with a thin margin and a long supply chain can have a landed cost that exceeds the selling price, and the formula shows that before the order is placed. The buyer who runs the numbers first cancels the order. The buyer who runs them later writes off the stock.
Non-product costs routinely run 20 to 40 percent over the invoice, which means a product priced at twice the invoice cost can still lose money once the full stack is applied. The margin is not the gap between the invoice and the price. It is the gap between the landed cost and the price, and the landed cost is the number that decides.
Keep reading: Insurance in Landed Cost: CIF vs FOB and the Duty You Owe, Brokerage Fees in Landed Cost: What You Are Actually Paying For, Why should returns costs be counted inside true landed cost per order?.
Landed cost is product cost plus freight plus insurance plus duties and taxes plus brokerage and handling. CIF, cost insurance and freight, is only product plus freight plus insurance, and it stops at the port. It does not include duty, brokerage, or handling, which is why pricing from CIF understates the real cost.
Handling: the terminal handling charge, drayage, chassis fees, warehouse receiving, and storage. These charges arrive after the freight is paid, on invoices the buyer never saw when the order was placed, and they are the line that most often breaks the margin.
They routinely run 20 to 40 percent over the invoice value. Cargo insurance is typically 0.3 to 0.5 percent of value, and brokerage is typically 150 to 500 dollars per entry. Small lines individually, large in aggregate across a year of shipments.
When the landed cost meets or exceeds the selling price. A product with a thin margin and a long supply chain can lose money even priced at twice the invoice cost, once the full stack is applied. Run the formula before the order is placed, not after the stock arrives.