This is just a partial list of the items you must consider when calculating the landed product cost of any given item or product, but each one is important. For example, transportation is about both how products travel and how quickly (or slowly) the products get from point A to point B. As the speed increases, so do the shipping costs.  

In order to better understand how different aspects will affect your final product costs, let’s look at a few more elements in detail.

One final point to note is that although these are all costs incurred to produce the final product, not all are required or applied to the actual product cost. There are some costs that will not be a recurring expense such as product sample, design fees, or product testing. With SellerVue is making it easy to include or excel the cost, which makes cost that much easier.

Bank Fees

Wire transfer fees are generally between $25 and $30 for outgoing transfers to a bank account within the US, and between $45 and $50 for transfers going out of the US. Whether you wire from banks or use a 3rd party processor such Alipay it is important to track the cost of the transfers. These fees quickly add up and over time amass a significant amount. 

Custom ​Taxes, Duties and Tariffs

This is where the calculations can get confusing and put you at risk of financial loss. Your specific product types, and the countries from which you are obtaining them or sending them, will impact the taxes and tariffs. In addition to tariffs, you might have to pay customs and assessments. According to the International Trade Commission, the Free Trade Agreement (FTA) might qualify the specific foreign product you need for duty-free entry if your overall final product contains materials primarily sourced in the United States. 

Designer Fees (Packaging, Copywriting or Design)

This can be the costs that involved with packaging, copywriting and design. Building a physical prototype also costs money, because you want a fully-working model, not simply a representation of what the product would look like. Although this is typically a onetime expense, it is still important to factor the costs in to ensure your ROI is met.

Factory Costs

This cost is simple to track and is essentially the purchase order turned invoice that creates this costs. Another factor to include are any additional expenses the supplier might charge such as set-up fees or service fees. These need to be added to get a true cost per unit.

Inspections

Product inspection is the process of checking goods for compliance with your specifications and requirements. Generally, if you are importing the products from overseas the inspection will be completed by a 3rd party. 

Insurance

As global importing and exporting numbers rise, so has the need for insurance. Each industry faces its own requirements and levels of risk when it comes to transportation insurance. For example, specialized coverage might impact the landed cost for importers utilizing marine shipping. Know what insurance needs you and your products have, and your options for meeting them.

Local Freight (Local Transportation and Storage Fees)

In addition to paying storage fees on foreign products you import or export, you might encounter additional transportation fees. Examples of these include costs to shrink-wrap pallets, load and unload products, pay for tolls, and endure layovers, as well as the application of fuel surcharges. Other fees can include shipping the products from the factory to the port of shipment, depending on the terms you have with your supplier, these costs can be negotiated.

Photography 

Product photography is taking pictures using specific techniques to accurately and attractively represent your product. Great product photography increases conversions by enticing shoppers to purchase your product. This is another example of a potential onetime expense, but again photography is expensive and this cost needs to be tracked for its return on investment.

​​Product Samples

There is usually no way around paying for your sample product from a supplier. One to save of payment fees is to ask your supplier to add the sample cost to your official purchase order. 

​Product Testing

Product Testing is any process by means of which a researcher measures a product's performance, safety, quality, and compliance with established standards. This is becoming an increasing requirement with selling certain products on Amazon or the other marketplaces. Depending on the requirements and frequency this is an important cost to track, as costly testing can chip away at your product margins.

Shipping Costs (Inbound Freight Shipping)

This cost includes the expense of getting the product or shipment from the port or origin to its final destination. Depending on the method of shipping fast or slow, your costs will likely rise with the quicker the  shipment times. Planning and having an efficient inventory management process to forecast inventory needs to ensure you the best rate adds a significant amount to your bottomline. 

Storage

Costs incurred for storage or inspections while the goods are in transit should also be recorded for accurate cost analysis.

​Other Miscellaneous costs associated with the product 

There naturally can be many varying costs associated with sourcing, manufacturing and the shipment of the product. Adding your costs into a centralised database such as SellerVue can help maintain accurate records and track costs efficiently. Costs to note are: the processing of payments or currency conversions. 

As you consider the factors that will influence your total landed product costs, remember that carriers and service providers have differing fees as well. While the product you want to acquire might have the same base cost from two different suppliers, the above factors and others can significantly affect your bottom line. Likewise, if you do not accurately plan for the shipping costs of the products you offer customers, your profits will suffer.