Landed Cost

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Landed Cost refers to the total cost of a product once it has arrived at the buyer's doorstep. It includes all expenses incurred in getting the product from the supplier to the final destination. Understanding landed cost is crucial for businesses when calculating the viability of importing goods vs domestic production.  

Components of Landed Cost include,  

Product Cost: The price paid to the manufacturer for the product itself.

Shipping Costs: 

• Freight Charges: The cost of transporting goods from the supplier to the destination port. 
• Insurance: Coverage for the goods during transit against loss or damage.
  

Customs Duties and Taxes:

• Import Tariffs: Taxes imposed by the government on imported goods.
• Value-Added Tax (VAT): Tax applied to the value added at each stage of production or distribution.
  

Handling Fees: Costs associated with loading and unloading goods at ports, as well as fees charged by freight forwarders and customs brokers.

Storage Costs: Fees for warehousing and inventory storage until the product is ready for distribution.

Other Charges: Any additional fees such as documentation fees, inspection costs, and other miscellaneous charges.