A small brand knows the price it paid the supplier. It often does not know the landed cost, which is the price plus everything it costs to get the goods to the shelf. The difference between the two numbers is the margin, and a brand that prices from the supplier invoice instead of the landed cost is pricing from the wrong number. The product that looks profitable at the supplier's price loses money by the time it clears customs.
The visibility problem is not a software problem. Enterprise systems compute landed cost automatically, but they cost more than the margin on a small brand's first container. The spreadsheet version works, and it works because the math is simple. The hard part is not the formula. It is collecting every cost and refusing to leave one out.
The number that matters is per unit, not per shipment. A $12,000 shipment of 1,000 units that costs $3,000 to land is $15 a unit, and the retail price has to clear $15 plus the selling costs. A brand that quotes the shipment total in a meeting and the unit price in a pricing call is using two different numbers, and the pricing call is the one that loses money.
Total landed cost is goods plus origin charges, freight, insurance, duty and tariffs, clearance and brokerage, destination handling, and inland delivery, plus financing if the goods sit in transit. Per unit is the total divided by sellable units, not units shipped, because damaged and rejected units do not sell.
The duty line is where the arithmetic gets interesting. Tariffs stack additively: a 9.8 percent MFN rate plus a 25 percent Section 301 rate is 34.8 percent, not a blended number, and the stack applies to the transaction value.
The fees stack too. The Merchandise Processing Fee is 0.3464 percent of customs value on a formal entry, clamped at a minimum and maximum, and the Harbor Maintenance Fee applies when the goods arrive by ocean. Marine insurance runs about 0.2 to 0.5 percent of shipment value, calculated on a CIF basis, the invoice plus freight, times 1.10, times the rate. None of these are large alone. Together they are the difference between a profitable SKU and a loss.
The first mistake is the duty basis. US duty is assessed on FOB transaction value, while most other countries tax on CIF, and the choice moves the duty by real money: in one worked example the duty-basis choice moved the sample duty by $2,513, or 17 percent. A brand that copies a supplier's CIF number into a US entry overstates the value and overpays.
The second mistake is the de minimis assumption. Section 321, the $800 duty-free exemption, is indefinitely suspended for commercial goods. A landed cost model that still assumes duty-free entry under $800 is wrong from the first line, and every price built on it is wrong with it. Drawback has its own clocks, a five-year claim window and a three-year record rule, and a brand that does not track them leaves duty on the table the same way.
The rule is simple: every cost is a calculated field, and every duty rate is an input. The MPF rate, the Section 301 rate, the freight quote, and the insurance rate all sit in input cells, and the per-unit cost is a formula that reads them.
When a tariff changes, the brand changes one input cell and the whole model reprices. A spreadsheet with hardcoded duty numbers has to be rebuilt by hand, and the rebuild is where the error creeps in. Destroyed goods show the same discipline: the drawback claim works when the paperwork is filed right, and the spreadsheet is the paperwork.
Check the model against one real entry a month: the broker's statement against the spreadsheet, line by line, and fix the formula when they disagree, because the broker's statement is the truth and the spreadsheet is the estimate. And confirm the current rates with a licensed customs broker before a sourcing decision, because the model is only as current as its inputs.
The supplier price plus every cost to get the goods to your shelf: origin charges, freight, insurance, duty and tariffs, clearance and brokerage, destination handling, and inland delivery. Per unit, it is the total divided by sellable units.
US duty is assessed on FOB transaction value, while most other countries tax on CIF. In one worked example the duty-basis choice moved the sample duty by $2,513, or 17 percent. Copying a CIF number into a US entry overstates value and overpays duty.
They stack additively. A 9.8 percent MFN rate plus a 25 percent Section 301 rate is 34.8 percent, applied to the transaction value, plus the Merchandise Processing Fee and the Harbor Maintenance Fee where they apply.
No, not for commercial goods. Section 321 is indefinitely suspended, so a landed cost model that assumes duty-free entry under $800 is wrong from the first line.