Build a landed-cost model for an import order

Define the cost boundary

Landed cost should answer a specific question: what has one sellable unit cost by the time it reaches a named place and condition? State the destination, Incoterm, currency, and whether warehouse receiving is included.

Collect the supplier invoice, international freight, insurance, origin charges not included by the supplier, brokerage, duty, import tax, port or airport charges, inland transport, inspection, and bank or currency costs.

Keep tax logic explicit

Customs value and the import-tax base vary by jurisdiction and product. Duty may apply to a value that includes freight and insurance; import tax may apply after duty. Some taxes may be recoverable and should not be buried in inventory cost. Confirm the treatment with a qualified broker or adviser.

For multi-SKU orders, allocate shared charges using a driver that matches the cost: value for insurance or duty-related charges, weight for heavy freight, volume for cube-driven freight, or a hybrid method.

• Keep source currency and exchange rate visible.
• Separate estimates from final entry documents.
• Version tariff classifications and duty rates.

Reconcile estimate to actual

After clearance, replace estimates with invoice and entry figures. Record the variance by cost category. The next purchase order should use current rates plus a contingency based on observed variance, not an unexplained percentage.