Landed cost: the number beginners skip
Why the cheapest supplier listing is often not the cheapest product once shipping and delivery time are counted.
Most new sellers compare suppliers on one number: the product price. That number is misleading on its own.
What landed cost is
Landed cost is what it costs to get one unit to your customer: product cost plus shipping. A $5.40 product with $3.80 shipping costs more than a $6.20 product with $2.10 shipping.
| Supplier | Product | Shipping | Landed | Delivery |
|---|---|---|---|---|
| A | $6.20 | $2.10 | $8.30 | 7 days |
| B | $5.80 | $1.90 | $7.70 | 14 days |
| D | $5.40 | $3.80 | $9.20 | 18 days |
Supplier D has the lowest product price and the highest landed cost.
Delivery time is a cost too
Supplier B lands $0.60 cheaper than A but takes a week longer. Slow delivery brings more "where is my order" messages, more refund requests, and more chargebacks. On a $39 product, a few extra refunds wipe out a $0.60 saving quickly.
How to choose
- Compare landed cost, not product price.
- Check delivery time to your customer's country, not the supplier's headline figure.
- Look at the supplier's rating and order history before you commit.
Try your own numbers in the profit margin calculator.
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