Know your true costs for imported products as tariffs and other cost change
Are you making pricing decisions based on incomplete cost data? Many companies only factor in their supplier’s production costs — missing critical elements like duties, tariffs, taxes, and transportation fees that significantly impact your true margins.
However, total landed cost calculations can be challenging. Trade data frequently changes and is difficult to capture on a regular basis. To accurately price products, brand owners need a landed cost model that eliminates any guesswork and can automate the data capture and calculations.
Why is total landed cost important?
From the supplier’s warehouse floor to your customer’s door – landed cost presents the full financial picture across the supply chain and is critical for determining actual margins. It accounts for transportation costs from port of export to port of entry, customs duties, import taxes, currency conversion costs, handling fees, and regulatory compliance expenses – all necessary for tracking actual incurred costs so you can establish a selling price and determine the actual margin per unit.
When you base pricing decisions solely on production costs, you’re working with an incomplete picture—and likely sacrificing profits without even knowing it. No company wants to lose customers (due to pricing too high) or earnings (due to costs that are too low).
Technology can help with landed cost calculations
No accounting team has the time to analyze every potential scenario by researching and manually calculating changing trade data, tariffs, and transportation costs. Fortunately, technology has stepped in to fill this gap and opened new possibilities for companies that rely on goods that cross international borders.
An end-to-end supply chain management platform like e2open allows organizations to:
Automate landed cost calculations that incorporate all aspects of your supply chain costs
Easily add accurate shipping costs by country and lane
Automate the classification of codes, duties, and tariffs
Leverage daily-updated global trade content from the world’s largest database
Make data-driven pricing decisions
Don’t leave money on the table with blind guesswork and take control of your supply chain economics. With complete and accurate landed cost calculations, your team can set data-backed optimal pricing that maintains target margins, even as costs fluctuate.
Download the landed cost solution brief to learn more.
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