How to Calculate Landed Cost from China
The full landed-cost formula for products sourced from China — unit price, freight, duties, fulfillment and hidden buffers — so your margin math is real.
Published October 3, 2026
Plenty of stores price on factory cost and discover too late that the margin was imaginary. Landed cost is the only number that tells you what a product actually costs to reach a customer. Price on anything less and you’re guessing.
The formula
Start with:
- Unit price — what the factory charges per piece.
- Freight to warehouse — China domestic move + international line to your fulfillment point.
- Duties and taxes — VAT / import duty per destination rules (see IOSS/DDP guidance).
- Fulfillment — storage, pick-pack, outbound shipping.
- Payment fees — platform and processor cuts.
- Buffer — defects, returns, repacking.
Landed cost = all of the above, divided across the units they apply to.
The omissions that kill margin
Sellers routinely drop:
- Duties (“I’ll worry about customs later”)
- Outbound shipping (“it’s included, right?”)
- Returns (“that won’t happen much”)
- Payment processing (“just a few percent”)
Each is small alone and lethal together.
Work in percentages too
Freight might be $0.80/unit, duty 6%, fulfillment $1.20, processing 3%. Express everything per unit so you can sanity-check against your sale price quickly.
Price from landed cost
Your minimum viable price covers landed cost plus your target margin. Anything you can’t name, you can’t price — so name every line, even the uncomfortable ones.
The takeaway
Landed cost is the truth serum for pricing. Add every cost from factory to doorstep, including the buffer, and price from that number. Margin you can’t explain is margin you’ve already lost.