---
title: "Landed cost"
description: "What is landed cost? The full cost of getting goods into your warehouse: price plus freight, duty and clearing. Learn the formula and see an import example."
url: https://1flux.ai/glossary/landed-cost
last_updated: 2026-10-11
---

[Procurement and inventory](https://1flux.ai/glossary#procurement-and-inventory)

# Landed cost

What is landed cost, and why does valuing imports at the supplier's price overstate your margin?

Glossary Updated 11 October 2026

Definition

Landed cost is the total cost of getting purchased goods into your warehouse: the supplier's price plus freight, insurance, customs duty, clearing and handling.

## What is landed cost used for?

Valuing imported stock at the supplier’s price alone understates its true cost and overstates margin. Landed costing spreads the extra charges across the items received, usually by value, weight or quantity.

An import shipment

Example

- Supplier invoice

  USD 100,000

- Freight and insurance

  USD 8,000

- Customs duty

  USD 5,000

- Clearing and handling

  USD 2,000

Landed cost

USD 115,000

Each item costs 15% more than its invoice price.

Recoverable taxes, such as import VAT that a registered business can reclaim, are normally left out of landed cost. Landed cost feeds [inventory valuation](https://1flux.ai/glossary/inventory-valuation) and, through it, your margins.

In 1flux

1flux values stock at weighted average, FIFO or standard cost, chosen per legal entity, with the cost layers behind every valuation in the cost audit report. [See inventory costing and valuation](https://1flux.ai/products/inventory/costing-and-valuation)

Related

## Keep exploring

### [Inventory valuation](https://1flux.ai/glossary/inventory-valuation)

The money value of the stock you hold.

### [Weighted average cost](https://1flux.ai/glossary/weighted-average-cost)

A costing method that values all units at their average cost.

### [Purchase price variance](https://1flux.ai/glossary/purchase-price-variance)

The gap between standard cost and the price actually paid.

### [Costing and valuation](https://1flux.ai/products/inventory/costing-and-valuation)

Weighted average, FIFO or standard cost per company, with cost layers you can audit.

Last updated 11 October 2026