The landed cost model is a spreadsheet, and the spreadsheet is either honest or it is not. The honest version has one rule: every cost is a calculated field, and the duty rates are inputs. The dishonest version has numbers typed in by hand, and the first rate change breaks it, quietly, in a cell nobody checks.
The formula is the whole model. Total landed cost is goods plus origin charges plus freight plus insurance plus duty and tariffs plus clearance and broker fees plus destination handling plus inland delivery, with financing on top. Per unit is the total divided by sellable units. If a cost is not in the formula, it is not in the price, and the margin you think you have is not the margin you have.
The per-unit number is the one that decides whether a product makes money, and it is the one that hides the most. A shipment with 1,000 units and 40 damaged or unsellable is 960 sellable units, and the per-unit cost divides by 960, not 1,000. The model that divides by the order quantity understates the cost on every unit.
The US assesses duty on the FOB transaction value, and most other countries assess it on CIF, the cost, insurance, and freight. The basis is not a detail. In one sample, the choice of basis moved the duty by $2,513, or 17 percent, on the same shipment.
Tariffs stack additively, not multiplicatively. A 9.8 percent rate plus a 25 percent rate is 34.8 percent, and the model that multiplies them gets a different number and a different margin. The fees follow the value: the merchandise processing fee is 0.3464 percent of customs value on a formal entry, clamped at the minimum and maximum, and the harbor maintenance fee applies when the goods come by ocean. Marine insurance runs about 0.2 to 0.5 percent of shipment value, on a CIF basis of invoice plus freight times 1.10 times the rate.
The additions to customs value are the lines the model most often misses. The five additions importers miss in customs value are in the entry, and the entry is the record, so the model that leaves them out is not a model. It is a wish.
Section 321 de minimis is indefinitely suspended for commercial goods, so the model that still assumes a duty-free threshold for small shipments is modeling a rule that no longer exists.
The exchange rate date matters as much as the rate. The exchange rate date that matters in landed cost is the date the entry uses, and the model that uses today's rate for last month's shipment is wrong in a way that looks right.
Freight is the biggest line in most landed costs, and it is the line that moves most. Freight surcharges, line by line, are the difference between the freight the store budgeted and the freight it paid, and the model that budgets the quote instead of the invoice is wrong on every shipment.
Every cost a calculated field, duty rates as inputs. When a rate changes, the whole sheet updates, and the importer sees the new margin immediately instead of discovering it in the entry.
One row per SKU, one sheet per shipment, and the total at the bottom. The model that mixes SKUs in one row hides the losers behind the winners, and the product that loses money on every unit keeps shipping because the average looks fine.
Goods plus origin charges plus freight plus insurance plus duty and tariffs plus clearance and broker fees plus destination handling plus inland delivery, with financing on top. Per unit is the total divided by sellable units.
Yes. The US assesses duty on FOB transaction value and most other countries on CIF, and in one sample the choice moved the duty by $2,513, or 17 percent, on the same shipment.
Additively. A 9.8 percent rate plus a 25 percent rate is 34.8 percent, not the product of the two. The model that multiplies them gets a different margin.
Every cost is a calculated field and the duty rates are inputs. When a rate changes, the whole sheet updates, and the importer sees the new margin immediately.