Calculating Landed Cost and Margin for Wholesale Resale

FOB Price Is the Starting Point, Not the Total Cost

A quoted FOB (Free on Board) price covers the product up to being loaded for shipment — everything after that point is an additional cost that has to be added before you know your true per-unit cost. Pricing a resale margin off the FOB number alone is one of the most common ways first-time importers end up with a slimmer margin than expected.

What Actually Goes Into Landed Cost

• FOB product cost — the base quote from the supplier
• Freight — air or sea, which varies significantly by method and destination, as covered in our shipping and logistics guide
• Insurance — optional but worth budgeting for on higher-value shipments
• Import duties and tariffs — destination and product-category specific, and worth confirming with a customs broker before finalizing pricing assumptions
• Customs clearance and brokerage fees — often a fixed or near-fixed fee regardless of shipment size, which matters more proportionally on smaller orders
• Domestic freight from port to warehouse — easy to forget since it happens after the "import" part is technically done

A Simplified Landed Cost Example

If a product quotes at $5.00 FOB per unit, and freight plus duties plus clearance fees add roughly $1.20 per unit at a given order volume, the real landed cost is $6.20 — a 24% increase over the FOB number alone. Margin calculations based on the $5.00 figure would overstate actual profitability by that same gap.

Why This Varies by Order Size

Fixed costs like customs brokerage fees get diluted across more units on a larger order, which is part of why tiered pricing and order-volume economics compound — a bigger order isn't just a better per-unit product price, it's also a lower per-unit share of the fixed landed-cost components.

Setting Margin Targets With Full Cost in Mind

Once landed cost is calculated accurately, setting a resale price with a target margin is straightforward math — but it depends entirely on getting the landed cost number right first. A margin target set against FOB price alone will be systematically optimistic.

Practical Next Step

Before finalizing a resale pricing strategy, get an FOB quote from the sourcing team, then work with your freight forwarder or customs broker to estimate the freight and duty components for your specific destination and order volume — that combination gives you the real number to build margin targets around.

Working through the numbers on a specific product? Request a quote to get the FOB starting point, or browse the full catalog to compare options.