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What is landed cost?


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Landed cost is the cost of a product when arrives to the buyer's door. It includes the original cost of the product and all the other costs which appear on the way: transportation fee, taxes, insurance etc. For example, even if you buy from the supplier a product with $100 but transportation fee costs $20 then the cost which should appear in inventory is $120.

Landing cost is important to be considered especially for international trades so that business owners don't lose the profitability of their businesses by considering the only original cost of the item without including all additional costs until the product arrives to the buyer.

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