What Is Landed Cost? Total Cost to 3PL Explained

[L] // Volume & Cost

Landed Cost

Landed cost is the all-in per-unit cost of getting inventory from the factory dock to your warehouse: factory price + freight + duties + brokerage + insurance.

Letter: L Category: Volume & Cost Updated 2026-05-10

[01] // How it actually works

In practice.

Landed cost is the only cost number that matters for pricing decisions. The factory quote is a starting point. Adding freight, duties, brokerage, insurance, and inbound trucking gets you to the real number — usually 15-40% above the factory quote, depending on origin and category.

Breakdown for an imported supplement at $3.20/unit EXW from an Asian factory, 5,000-unit run, shipped LCL (less than container load):

Factory price (EXW): $3.20
Origin handling and trucking to port: $0.08
Ocean freight (LCL, prorated): $0.18
Origin and destination port fees: $0.06
U.S. customs duty (often 0% for supplements, higher for cosmetics): $0.00
Customs brokerage and entry filing: $0.04
Marine insurance: $0.02
Trucking port-to-3PL: $0.05
3PL receiving fee: $0.03

Landed cost: ~$3.66/unit — 14% above the factory quote.

For domestic private-label runs (U.S. factory to U.S. 3PL), the lift is smaller — usually 5-12% — because there's no ocean freight, no customs, no duties. The trade is shorter lead times and tighter QC oversight against a slightly higher factory price.

[02] // Founders' trap

What founders get wrong about Landed Cost.

// Real-talk

Founders price against the factory quote, not the landed cost. The cost of that mistake is real — 10-25% of your gross margin disappears the moment the goods land. If your factory quote is $3.20 and you priced your retail at $19.99 against a $3.20 COGS expecting a 6x markup, your real landed COGS of $3.66 cuts your gross profit per unit by $0.46.

The other miss: assuming duties are zero. Most dietary supplements enter the U.S. duty-free, but cosmetics, food, and pet products often carry 1.5-6.5% duty. Check the HTS code (Harmonized Tariff Schedule) for your specific category before pricing.

[04] // Related guides

Read deeper on these.

[REF] // References

Authority sources cited on this entry.

FDA: cGMP for Dietary Supplements (21 CFR 111) (FDA.gov)

/ Citations verified against the issuing body's published page. Last verified: 2026-05-10.

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