Free lesson · 10 minute read · Reseller Growth Systems
Landed Cost: Know What Inventory Really Cost You
Combine purchase price with the costs required to get the item into sellable inventory.
Your goal
Calculate a consistent landed cost and allocate shared costs across multi-item purchases.
When to use
Use on shipped purchases, cross-border buys, auction lots, and bundles.
Why this matters
Weak cost records make good-looking margins disappear during accounting or cash review.
The lesson
The number you paid the seller is not always the amount the inventory cost your business.
Landed cost can include purchase price, tax, buyer premium, shipping, card surcharge, customs, brokerage, duty, required accessories, and other direct costs needed to receive the inventory. Decide which cost categories your business includes and apply the rule consistently.
Bundles create another problem: allocation. If you pay $2,000 for four devices and another $200 shipping, you need a defensible way to assign the $2,200 across the units. Equal allocation works only when units are economically similar. Relative expected resale value is often more sensible when one device is worth much more than another.
Cost allocation is not about manufacturing perfect precision. It is about avoiding the fiction that each unit has zero or identical cost.
Record the exchange rate when foreign currency is involved. If you later use today's exchange rate, historical cost can silently change.
Once landed cost is captured, use it consistently as the cost basis for inventory and eventual COGS.
Worked example
Three laptops cost USD $1,500 total plus $100 shipping and $50 brokerage. At the purchase-date exchange rate, total CAD landed cost becomes $2,277. If expected resale values differ, allocate the landed cost proportionally rather than dividing by three automatically.
Practical checklist
- Product price
- Tax
- Premium/fees
- Shipping
- Customs/brokerage/duty
- Exchange rate
- Shared-cost allocation
- Unit landed cost
Common mistakes
- Ignoring import costs
- Using current exchange rate for old purchases
- Dividing a mixed-value bundle equally
- Recording shipping twice
Key takeaways
- Landed cost is the economic entry price
- Bundle allocation should reflect reality
- Historical exchange rate belongs with historical cost
Put this into practice
Recalculate landed cost for one past multi-item purchase and compare it with what you originally thought each unit cost.
Before you finish
Every current unit has a cost basis that includes the direct acquisition costs you decided to track.
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