Most teams can recite the factory price.
Fewer can say what that same unit cost when it became sellable stock, or how much cash sat in each leg on the way.
That gap is how you underprice, trust a margin report that is missing ocean, and pick the "cheaper" factory that burns money in receiving.
This page walks the cash and the bills from the factory floor to the warehouse door.
What landed cost is defines the term.
How to calculate landed cost for imported products is the policy math.
The how-to is the $14.10 method.
If you only needed to split one freight bill, that is allocate freight.
If You Still Compare Factories On The Invoice
You import finished goods, and someone still picks a factory on the ex-factory line.
The question here is where the extra $1.40 went, not another definition of landed cost.
The Factory Quote Is One Stage
Suppliers quote EXW or FOB.
Those quotes are useful, and they are incomplete.
Between that invoice and sellable inventory the unit can pick up origin handling, freight, insurance, duty, brokerage, port, inland, and receiving.
Teams then think they bought a $4.80 product when the warehouse-ready unit is $6.20.
That changes margin, MOQ, reorder timing, channel price, and which factory wins.
Where The Money Sits
Each stage is a bill and a wait.
Factory
The commercial invoice for the goods.
Packaging, labeling, or a basic QC line may already be in it.
This is where most sheets stop.
Origin
EXW means you also pay to get the cargo to the port or the consolidator.
Local trucking, export docs, terminal handling, forwarder fees before the vessel exists.
International Freight
Ocean, air, or courier.
This is the line that moves when the factory price does not.
Duty And Entry
Classification, origin, customs value.
Brokerage, merchandise processing, harbor maintenance on ocean, exam fees when they happen.
Calculate import duty from China is the duty walkthrough.
Domestic Delivery
Drayage, trucking, parcel transfers, warehouse appointments.
Still not sellable.
Warehouse Receiving
Inspection, sorting, relabel, FBA prep.
If the unit is not pickable without that work, the cost belongs here, not in "overhead we ignore."
Net 30 is why this path hurts cash: the factory invoice can come due while the unit is still in origin trucking or on the water.
Worked: $4.80 Becomes $6.20
5,000 units at $4.80.
| Stage | Amount |
|---|---|
| Factory | $24,000 |
| Origin handling | $650 |
| Ocean freight | $3,100 |
| Insurance | $95 |
| Duty and import fees | $2,060 |
| Domestic delivery | $780 |
| Warehouse receiving and prep | $315 |
| Factory-to-warehouse total | $30,999 |
$30,999 / 5,000 = $6.20 per unitQuoted factory: $4.80.
Warehouse-ready: $6.20.
About 29% more, before a customer exists.
This is a full-quantity example.
If 80 units fail receiving, the per-unit page is the one that divides by 4,920.
The Cheap Factory That Was Not Cheap
Shipment totals hide SKU and supplier friction.
Two factories quote the same backpack:
- Supplier A: $8.90 a unit, clean packing, few carton issues
- Supplier B: $8.55 a unit, repeated relabel and repack at the warehouse
B looks $0.35 cheaper.
On a 2,000-unit order B also created $420 in extra relabel, $180 in shortage-claim admin, and $250 in expedited parcels to cover the miss: $850.
$850 / 2,000 = $0.425 per unitB is now $0.075 more expensive than A, before you count the stockout.
A supplier evaluation matrix is how that receiving record gets a weight next to the quote.
Other misses: comparing factories on unit price only, tracking cost by container but not by SKU, ignoring the SKU that always needs a relabel.
How To Keep The Journey Honest
- Factory price by SKU.
- Tag the shipment with this season's freight and fee assumptions.
- Capture import costs as the PDFs arrive.
- Allocate shared bills. Freight across SKUs is the split.
- Reconcile estimate to actual after receipt.
Once those five exist, you can ask which family ate the freight, which factory created hidden receiving cost, and which SKU still clears the margin after the warehouse door.
Track shipping and manufacturing costs is the workflow for those lines.
A sheet is fine while volume is low.
Several factories, open POs, and a revised ocean bill is coordination, not arithmetic.
Spreadsheet vs software is that comparison.
The landed cost calculator will take the same stack on a live inbound.
When the files no longer fit a tab, SupplyAutomate keeps the supplier, the order, the bills, and the unit cost in one workspace.