Landed cost and cost of goods sold (COGS) are two important terms in business accounting. The former refers to the total price of a product from its origin to the point where it’s available for sale, while the latter deals with all associated costs related to producing and selling the final product.
Landed cost includes direct costs such as production materials, transport, tariffs and duties, and indirect costs such as inventory storage, insurance, and transaction fees. COGS is limited to only those associated costs directly involved in the manufacturing process. To put it simply, landed cost is the total amount it takes to get a product ready for sale, while COGS is the actual money spent on producing a specific item. Understanding the difference between these terms can help companies make better decisions when it comes to pricing and managing their finances.