# Landed cost per unit: the formula that catches the fees your supplier left out

Source: https://landedsight.com/blog/2026-11-12-landed-cost-per-unit-formula.html

Cross-border operations guide · November 12, 2026


**Short answer:** Landed cost per unit equals the total cost of getting the goods to your warehouse, goods plus origin charges plus freight plus insurance plus duty plus clearance plus destination handling plus inland delivery, divided by the number of sellable units. The formula catches the fees the supplier's quote leaves out, because the quote is the price of the goods, and the landed cost is the price of having them.

## The formula, and why it has to be per unit

The total is the sum of every cost between the factory and the shelf: the goods themselves, the origin charges, the freight, the insurance, the duty and tariffs, the clearance and broker fees, the destination handling, and the inland delivery, plus financing where it applies. The per-unit number is that total divided by the sellable units, not the shipped units, because the units that arrive damaged or unsellable do not carry the cost. The units that sell do.

The per-unit number is the one that decides the price. A shipment that costs $10,000 to land and contains 1,000 sellable units costs $10 a unit to have. The same shipment with 800 sellable units costs $12.50 a unit. The supplier's quote did not change. The yield did, and the yield is the number the quote never mentions.

The most common error is the duty basis. The United States taxes duty on the FOB transaction value, while most other countries tax on a CIF basis, and the choice moved the duty by $2,513, or 17 percent, in one published worked example. The same shipment, the same rate, a different basis, and a different bill.

## The fees the quote leaves out

The merchandise processing fee is the first. It is 0.3464 percent of the customs value on a formal entry, clamped between a floor and a cap that CBP adjusts for inflation, and it applies to every formal entry whether the duty is zero or not. A shipment with no duty still pays the MPF, and a model that omits it understates the cost on every line.

The harbor maintenance fee is the second, and it applies only when the goods arrive by ocean: 0.125 percent of the cargo value, paid on the value of commercial cargo loaded or unloaded at US ports. A shipment that moves by air never sees it, and a shipment that moves by ocean always does, which is one more reason the mode of transport changes the landed cost.

The insurance is the third, and it is the one most often guessed. Marine cargo insurance typically runs 0.2 to 0.5 percent of the shipment value, calculated on a CIF basis, the invoice plus freight, times 1.10, times the rate. A shipment insured at the invoice value alone is underinsured by the freight and the uplift, and the claim, when it comes, is short by exactly that amount.

## The stacking error, and the spreadsheet rule

Tariffs stack additively, and the model has to show the stack. A product with a 9.8 percent MFN rate and a 25 percent Section 301 duty pays 34.8 percent, not 25 percent, and the Section 232 duty, where it applies, adds on top of both. A model that shows one rate hides the total, and the total is the number the invoice carries.

The spreadsheet rule is the one Costvanta and SupplyChainDesk both state: every cost is a calculated field, and the duty rates are inputs, not constants. A rate that is typed into a cell as a number cannot be updated when the rate changes, and the rates change by notice. A rate that is an input can be changed once and flows through every product.

And the de minimis line has to go. Section 321 de minimis is indefinitely suspended for commercial goods, so a model that still assumes duty-free under $800 is wrong on every parcel, not just the expensive ones. [The small brands that get landed cost visibility without enterprise software do it with this spreadsheet, not with a system, and the spreadsheet works because every cost is a field and every rate is an input](https://landedsight.com/blog/2026-11-11-landed-cost-visibility-without-enterprise-software/).

## Frequently asked questions

### What is the landed cost formula?

Total landed cost equals goods plus origin charges plus freight plus insurance plus duty and tariffs plus clearance and broker fees plus destination handling plus inland delivery. Per-unit landed cost is that total divided by the number of sellable units.

### Why divide by sellable units instead of shipped units?

Because the units that arrive damaged or unsellable do not carry the cost. The units that sell do. A shipment with 1,000 units shipped and 800 sellable costs more per unit than the same shipment with all 1,000 sellable.

### What is the merchandise processing fee?

It is 0.3464 percent of the customs value on a formal entry, clamped between a floor and a cap that CBP adjusts for inflation. It applies to every formal entry whether the duty is zero or not.

### Do tariffs stack, or does the highest rate apply?

They stack additively. A product with a 9.8 percent MFN rate and a 25 percent Section 301 duty pays 34.8 percent, and a Section 232 duty adds on top of both. The model has to show each line separately.