Landed cost
The full cost of an item delivered to your premises: price plus freight, insurance, duties and handling.
What it means in business
The landed cost adds to the supplier's price everything it takes to get the goods to you: freight, insurance, customs duty on imports, port and clearing charges, and unloading. Taxes you can claim back as credit are normally left out. It is the true cost to compare when choosing between suppliers.
Example
An imported part is priced at 100 per piece but with freight, duty and clearing it costs 128 to land. A local supplier at 118 is the cheaper choice. This is an illustration of normal business use rather than a quoted case study.
How to use it correctly
Include every cost needed to bring the goods in, spread them over the items fairly, and use the landed cost, not the invoice price, in costing and quotes. Confirm with your accountant which taxes are part of the cost.
Common confusion
Landed cost is not the supplier's price, and it is not the selling price. Comparing quotes on price alone can pick the more expensive supplier.
Related glossary terms
Written on 24 October 2026 for lamp. Confirm the current rules with the official source or an adviser before relying on it.