Landed cost is the real cost of getting one unit to your warehouse, ready to sell. Sellers who skip it discover too late that ‘cheap’ products were never profitable.
The formula
Landed cost per unit = product cost + freight per unit + customs duty per unit + clearance and handling per unit. Everything that gets the unit to you, divided across the order.
A worked example
If a product costs Rs.600, freight adds Rs.120 per unit, duty adds Rs.150, and clearance adds Rs.30, your landed cost is Rs.900 — not the Rs.600 on the quote. Your margin must be calculated from Rs.900, then Amazon fees and ads subtracted on top.
Why it changes decisions
A product that looks like a winner at the quoted price often collapses once duty and freight are added. Running landed cost first stops you ordering products that can never profit.
Build it into validation
Make landed cost a fixed step in every product evaluation. It is a five-minute calculation that protects lakhs of capital.
Frequently Asked Questions
What is landed cost?
The true per-unit cost to get a product to your warehouse, including product, freight, duty and clearance.
What is the formula?
Product cost + freight + duty + clearance, all per unit.
Why does it matter so much?
Because the quoted product price hides freight and duty that can erase your margin.
When should I calculate it?
Before ordering — as a fixed step in evaluating every product.
✓ Want your numbers checked before you order? Book a free 15-minute guidance call.
Ali Lokhandwala has sold on Amazon India for 7 years, runs 80+ live private-label products with a 35-person team generating Rs.3.5 crore a month, and has trained 15,000+ entrepreneurs whose brands have crossed Rs.160 crore in combined sales. He still runs his Amazon business daily.
