Landed cost: what it includes and how to calculate it for goods from China

Freight is where estimates go wrong most often. Air and express are priced on chargeable weight, the higher of actual weight and volumetric weight. A light product in a big carton is billed for the carton. Get carton sizes and gross weight from the supplier before you trust any freight number.

Example only. The prices and fees are assumed for illustration, and the duty and VAT rates are the ones published when we wrote this. Your product, route and date will give different numbers.

Step 1 is chargeable weight. Volumetric weight per carton is 50 x 40 x 35 / 6,000 = 11.7 kg. The actual weight of 14 kg is higher, so each carton is billed at 14 kg and the whole shipment at 70 kg. Air cargo commonly uses a divisor of 6,000. Express couriers often use 5,000, which makes light cartons cost more.

The example is simplified. Under EU rules only a share of air freight goes into the customs value, and that share varies by departure airport. Counting all of it makes the duty here a little high. German import VAT can also include transport costs to the first destination in Germany, which we left out.

If the buyer is VAT registered and can reclaim import VAT, the cost that stays with the business is $1,301.03 minus $183.94, which is $1,117.09 or about $2.23 per unit. Price against the higher figure until your accountant confirms you can reclaim it.

Look at what moved the result. Freight came to $294, about half the goods value. That happens often with light, low-value goods sent by air, and it is why the same order by sea can land cheaper per unit if you can wait.

The same order into the US needs different checks. Treat these as questions to answer for your own product before you pay the supplier.

1. Customs value: the US normally uses the transaction value, the price paid for the goods. International freight and insurance shown separately on the invoice are usually excluded. That makes the duty base smaller than in the EU.
2. HTS code and duty rate: find the 10-digit code for your product at hts.usitc.gov and read the general duty rate. The code a supplier writes on the invoice is only a starting point.
3. Section 301: many goods of Chinese origin carry an extra Section 301 duty on top of the general rate. Check whether your HTS code is covered. The Section 301 China duties are listed in the Chapter 99 headings that begin 9903.88.
4. Other added duties: further tariffs on Chinese goods have been added and changed several times since 2025. Check what applies on the date your goods enter, with your customs broker.
5. Small parcels: duty-free treatment for low-value parcels was suspended in 2025, so small shipments are no longer a way around duty. The CBP fact sheet below explains the change.
6. Entry fees: formal entries pay the merchandise processing fee, and goods arriving by sea also pay the harbor maintenance fee. Your broker adds both to the entry.
7. Sales tax: there is no federal import VAT. State sales tax applies when you sell, so it usually stays outside landed cost.

Commercial shipments valued over $2,500 generally need a formal entry, and a formal entry needs a customs bond. If you import regularly, a licensed customs broker is worth having before your first shipment arrives.

In the EU, look up the 10-digit commodity code in TARIC. It shows the third-country duty and any anti-dumping duty on goods from China. Anti-dumping duty covers some ceramic tableware and steel goods from China, among other products. It can be far higher than the normal duty.

In the UK, use the UK Trade Tariff on GOV.UK. The UK has set its own rates since leaving the EU, so look the code up again there instead of reusing an EU figure.

Import VAT in both is charged on the customs value plus duty. The rate depends on the country and sometimes on the product.

• Domestic freight from the factory to the port or warehouse. On 1688 listings it is often not in the price.
• Customs broker and port handling fees at your end. Small shipments pay minimum charges that make them expensive per unit.
• Extra tariffs on goods from China in some markets, on top of the standard duty.
• Currency conversion and bank or card fees.
• Labels, inserts or FBA prep if your sales channel requires them.
• Samples and their shipping. Keep them out of the unit cost but inside the product budget.
• Relabeling or repacking if goods arrive wrong.
• Storage at your end while the goods wait to sell.

• Get real carton data first and plan the shipment around it. Changing the number of units per carton can cut volumetric weight.
• Ship by sea when the timing allows. Keep air for samples and urgent restocks.
• Consolidate products from several suppliers into one shipment, so the minimum charges are paid once.
• Check the HS code before you order. A wrong code causes delays and can mean paying the wrong duty.
• Ask what the supplier's price includes. An EXW price and an FOB price for the same goods are different numbers.

Our sourcing fee is part of the calculation too. It starts at 5% of the goods value and steps down to 3% on larger orders, with a $49 minimum, and it appears as its own line on the quote. We add no markup to supplier prices.