Cost Management
Landed Cost
Definition
The total cost of a product delivered to the customer, including COGS, freight, duties, tariffs, insurance, and handling fees.
By Herzel MishelFounder, AgentisLast reviewed
Landed cost is the true total cost of delivering a product to an end customer. It includes the cost of goods sold (COGS), inbound freight from suppliers, outbound shipping to customers, customs duties and tariffs, insurance, handling fees, and any other costs incurred in the supply chain. For ecommerce merchants, accurately calculating landed cost per order is essential for determining true profitability. Many merchants underestimate landed cost by excluding freight zone differentials, dimensional weight surcharges, FX fluctuations on imported goods, and duty/tariff changes. The gap between perceived margin and actual margin after full landed cost accounting is often where a meaningful share of profit disappears.
Sources
Related Terms
Margin Analysis
Checkout Margin Erosion
The loss of profit margin that happens when an order is priced at checkout, caused by unmonitored discount stacking, freight cost miscalculation, FX fluctuations, and stale COGS data.
Cost Management
Dimensional Weight Pricing
A shipping pricing method that charges based on package volume rather than actual weight, often resulting in higher costs for bulky, lightweight products.
Cost Management
Tariff Impact on Ecommerce
The effect of import duties and trade tariffs on ecommerce product costs, particularly the de minimis threshold changes affecting cross-border commerce.
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Agentis Solution
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Factor FX, duties, and international freight into every cross-border order. Agentis flags or holds orders whose true landed cost breaches your profit floor before they ship.
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Stop judging margin on stale cost data. Agentis pulls live COGS from Oracle NetSuite (commonly via Celigo) and uses current costs to check every Shopify Plus order's true margin within 60 seconds, before fulfillment.
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