Landed cost

Landed cost for supplier quotes: the formula buyers actually need

Unit price is what the supplier charges per piece. Landed cost is what the piece costs after freight, duty, one-time charges, payment terms, and risk. The difference is often 10–30%.

The formula

Landed total = product subtotal + one-time charges + freight + duty + packaging + financing cost
Landed unit cost = landed total ÷ total quantity

A more conservative version adds a risk allowance:

Risk-adjusted total = landed total × (1 + risk score × risk premium)

For example, a 20% risk premium at a risk score of 50 means landed total × 1.10.

Worked example

Line	Supplier A (FOB)	Supplier B (DDP)
Product subtotal	$21,000	$23,500
Printing + finish	$2,400	$2,000
Tooling	$850	Included
Freight	Not quoted	$1,800
Duty / clearance	Not included	Included (DDP)
Financing cost (30% deposit)	$70	$77 (Net 30)
Landed total	$24,320 + freight + duty	$27,377
Risk adjustment	+18%	0%
Risk-adjusted	~$28,700	$27,377

Supplier A looks $3,000 cheaper on the headline. Once you add the missing freight, duty, and risk, Supplier B is the safer award.

What belongs in landed cost

Product: material, printing, lamination, assembly, testing, certification.
One-time: tooling, molds, plates, setup, sampling, proofing.
Logistics: freight, insurance, packaging, pallets, crates, last-mile delivery.
Import: duty, tariff, customs clearance, brokerage, import tax.
Financing: deposit, prepayment, and payment-term cost.
Risk: missing scope, short warranty, long lead time, quote expiry, unclear terms.

Common mistakes

Comparing FOB to DDP without adding freight and duty to the FOB quote.
Comparing unit price at different quantities or MOQs.
Ignoring one-time tooling because it is not in the per-unit price.
Treating a 50% deposit as free; it ties up cash for months.
Assuming a missing line item means “included” rather than “unknown.”

Let QuoteLevel do the math. Drop in supplier PDFs and get landed cost, financing cost, and a risk-adjusted total with source links. Add it to Chrome.