Landed cost is the total amount a buyer pays to get a product to their door, not just the sticker price. It rolls together the item price, freight, insurance, customs duties, import taxes, and handling or brokerage fees. In B2B quoting, especially for imported or cross-border goods, sellers often show landed cost so the buyer can compare true delivered pricing instead of a bare unit price that hides real costs.
How it works
You start with the product cost, then add every expense incurred between the supplier and the buyer’s receiving dock. A common breakdown looks like this:
- Item or unit price
- Shipping and freight
- Insurance on the shipment
- Customs duties and tariffs
- Import taxes (for example VAT or GST)
- Handling, brokerage, and port or terminal fees
Add those together and you get the landed cost per order or per unit.
Why it matters
Two quotes can list the same unit price and still differ by a wide margin once duties and freight are added. A buyer comparing suppliers needs the landed figure to judge which offer is actually cheaper. For the seller, quoting landed cost reduces back and forth, sets accurate expectations, and lowers the chance of a dispute when the invoice or customs bill arrives.
Example
A distributor requests 500 units at 10.00 each, so 5,000 in goods. Add 600 freight, 90 insurance, 350 duty, and 120 handling, and the landed cost is 6,160, or 12.32 per unit. That 2.32 per unit gap is exactly what a buyer would miss looking at item price alone.
When you build B2B quotes on Shopify, you can present landed cost as line items or a clearly labeled total so the buyer sees the full delivered price before they accept. For related terms, see the B2B quoting glossary.