What Landed Cost Is
Landed cost is the total cost to get a product to your warehouse, ready to sell. It is not just the price paid to the supplier: you have to add every charge incurred along the way. Pricing off the true per-unit landed cost, rather than the purchase price alone, is what separates a real margin from an imaginary one.
The usual components are: product cost (what the supplier invoices), freight (ocean, air, or road), customs duty and tariffs, cargo insurance, and other fees such as handling, customs brokerage, and storage. This calculator sums those five buckets, then divides by quantity to give the per-unit landed cost.
Allocating Landed Cost
When a single shipment contains several products, the real question is how to spread the shared charges (freight, duty, insurance) across the lines. Three common methods exist: by value, by weight, and by quantity.
By value: each line absorbs a share of the charges proportional to its value. By weight: the split follows weight, which fits when freight dominates. By quantity: charges are divided evenly across units, simple but crude when items differ a lot. This calculator handles a single-product shipment; for mixed shipments, pick one method and apply it consistently.
Landed Costs in Odoo
Odoo ships a native Landed Costs feature. You enter freight, customs, and insurance charges on a dedicated document, choose the allocation method (value, weight, quantity, or volume), and Odoo spreads those costs onto the stock valuation of the received products. Inventory value and unit cost then reflect the true delivered cost, not just the purchase price.
This requires automated inventory valuation and real-time accounting set up correctly. Octura configures Landed Costs, account mapping, and automatic allocation for importers and distributors who want a reliable margin at the line level.
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