Landed Costs

Landed Costs

Landed costs are all of the costs associated with bringing a product or good to its final destination. This includes the cost of purchasing the goods, shipping and handling charges, import duties and taxes, and any other miscellaneous fees. The purpose of landed cost accounting is to help businesses understand the full cost of their goods so that they can make informed decisions about pricing and sourcing.

When importing goods from another country, businesses must be aware of the landed cost in order to stay competitive. For example, if a company is selling a product for $100 and their competitor is selling the same product for $120, but the competitor’s landed cost is only $110, then the company is at a disadvantage. By understanding landed costs, businesses can adjust their prices accordingly.

Landed costs can also have an impact on business decision-making when it comes to sourcing goods. For example, if Company A finds that it can purchase a good from either Country X or Country Y, but Country X has a higher landed cost due to tariffs and other fees, then Company A may decide to source the good from Country Y instead.

In short, businesses need to be aware of landed costs in order to make informed decisions about pricing, sourcing, and profit margins.