Short answer: landed cost is the full cost of getting a product from a factory in China to your warehouse in Ireland, the UK or the EU. It is not just the supplier’s price. It also includes inspection, packing, shipping, insurance, customs duty, import VAT, broker fees and local delivery. Divide the total by the number of units and you know your real cost per unit, the number you need to set prices and check your margin.
This guide is written by our team in Yiwu, China. We prepare landed cost calculations for clients in Ireland, the UK and across Europe before they place an order.
Important: duty, VAT and fees depend on your product, its commodity code and where you import. We recommend asking a local customs broker to confirm duty and VAT before you order.
Why the supplier’s price is not your real cost
Many first-time importers compare a price on 1688 or Alibaba with a price in a local shop and expect a big margin. Then shipping, duty, VAT and fees arrive, and the margin is much smaller than planned. A landed cost calculation shows the real number before you commit money.
What goes into landed cost
| Cost | Where it is paid | What it covers |
|---|---|---|
| Product price | China | The price agreed with the supplier |
| Agent or sourcing fee | China | Finding suppliers, negotiating, managing the order |
| Samples | China | Samples and their delivery before mass production |
| Inspection | China | Quality check before shipping |
| Packing and labelling | China | Export cartons, barcodes, Amazon labels |
| Local delivery in China | China | From the supplier to the warehouse or port |
| Freight | China to destination | Sea or air transport |
| Insurance | China to destination | Cover for loss or damage in transit |
| Customs duty | Destination | Depends on the product’s commodity code |
| Import VAT | Destination | Charged on the value of the goods, shipping and duty |
| Broker and port fees | Destination | Customs declaration, terminal and handling charges |
| Local delivery | Destination | From the port or airport to your warehouse |
How to calculate landed cost step by step
- Start with the product cost: unit price multiplied by quantity.
- Add costs in China: agent fee, samples, inspection, packing and delivery to the port.
- Add freight and insurance to your country.
- Find the customs value. In the EU and the UK, duty is usually calculated on the value of the goods including shipping and insurance to the border.
- Calculate customs duty using the rate for your product’s commodity code.
- Calculate import VAT on the customs value plus duty.
- Add broker, port and local delivery fees.
- Divide the total by the number of units to get your landed cost per unit.
If your business is VAT-registered, import VAT can usually be reclaimed, so it affects your cash flow rather than your final margin. Ask your accountant how this works for you.
Incoterms: who pays for what
The Incoterm on your order decides which costs the supplier includes in the price. Always check it before comparing offers:
| Term | What the supplier’s price includes |
|---|---|
| EXW (Ex Works) | Goods only, collected at the supplier. You pay everything else. |
| FOB (Free On Board) | Goods delivered and loaded at the port in China. You pay freight and everything after. |
| CIF | Freight and insurance to your port. You pay import costs and local delivery. |
| DDP (Delivered Duty Paid) | Delivery to your door with duty and taxes paid. Check carefully who is the importer. |
Two offers can look very different just because one is EXW and the other is FOB. Compare them on the same basis.
How shipping method changes your cost
Freight is often the cost that changes most. Sea freight is usually cheaper per unit for larger and heavier orders, while air freight is faster but costs more per kilo. Bulky, light products are charged by volume, so packing efficiently matters. For a full comparison, read Shipping from China: sea freight vs air freight.
Buying from several suppliers? Consolidating goods in one warehouse in China lowers the cost per unit compared with many small parcels, especially since the EU ended the duty-free limit for small parcels. Read more in importing after the end of the €150 duty-free limit.
Ireland, the UK and the EU: what is different
- Ireland and other EU countries use the EU customs tariff, and import VAT is charged at the national rate of the country of import. You need an EU EORI number.
- The UK uses the UK Global Tariff, and VAT is collected by HMRC. You need a GB EORI number.
- Duty rates can differ between the EU and the UK for the same product, so calculate separately if you sell in both.
For the full process, see our import from China to Ireland guide. Selling on Amazon? Add marketplace and fulfilment fees too, as explained in our guides to Amazon.ie and Amazon UK FBA.
Common mistakes in landed cost calculations
- Comparing EXW and FOB prices as if they were the same.
- Forgetting that duty is calculated on goods plus shipping, not on goods alone.
- Leaving out broker, port and local delivery fees.
- Using the wrong commodity code and duty rate.
- Not including samples, inspection and packing.
- Ignoring the cost of defective or missing units.
- Forgetting currency changes between ordering and paying.
How SilkwayMall helps
Before you order, we can prepare a landed cost calculation in Excel for your products, showing every cost from the supplier in China to your door. We source suppliers, check goods, consolidate them in our Yiwu warehouse, arrange shipping and issue an EU VAT invoice. See how our fees work on the price page, compare buying platforms in 1688 vs Alibaba vs Taobao, or read our Yiwu market guide.
FAQ: landed cost when importing from China
What is landed cost?
The total cost of a product delivered to your warehouse, including the product price, shipping, duty, taxes and all fees.
Is import VAT part of landed cost?
It is part of the money you pay at import. If you are VAT-registered, you can usually reclaim it, so many businesses track it separately from their final cost.
How do I find the duty rate for my product?
Find the product’s commodity code and check it in the EU or UK tariff. A customs broker can confirm the correct code and rate.
Is sea freight always cheaper?
Usually per unit for larger orders, but not always for very small, light shipments. Compare both options for your order.
Do I need a customs broker?
Most importers use one. A local customs broker submits the declaration, confirms duty and VAT and helps avoid unexpected costs.
Related guides
- Import from China to Ireland: the complete 2026 guide
- Shipping from China to the UK: sea freight vs air freight
- Importing from China after the EU ended the €150 duty-free limit
- Amazon UK FBA from China: how to source and ship products to the UK
- Yiwu market guide: how UK and Irish buyers source from the world’s largest small goods market
- How to check a supplier in China: a checklist for UK and Irish buyers
- Do I need a VAT number to import from China? Ireland, UK and EU guide
This guide is for general information only. Customs, tax and shipping costs depend on your goods and can change, so we recommend consulting a local customs broker and an accountant before you import.