Landed cost
Landed cost is what a product actually costs you by the time it is on your shelf, including the purchase price plus freight, duty, clearance, insurance and handling.
Also searched as: true cost of goods, total landed cost
Updated July 2026
Businesses that price off the invoice price alone systematically overestimate their margin. For imported goods the gap between invoice price and landed cost is frequently double digits as a percentage, which is enough to turn a product you think is profitable into one that is not.
The difficulty is allocation. One shipment contains twenty products and one freight bill. Splitting that cost across the items by value, weight or volume is arithmetic nobody wants to do by hand, so it either gets estimated or ignored.
When the system allocates it at the point of receipt, every downstream number inherits the correct cost: stock valuation, cost of goods sold, and the margin figure a salesperson sees when they are deciding how much discount to give.
Where the margin went
An item invoiced at $8.40 with freight, duty and clearing allocated might land at $9.80. Sell it at $11 and you are making 11%, not the 24% the invoice price suggested.
Where this lives in Wizard
ProcurementRaise purchase orders, see what you last paid, and route approvals without an email chain.
InventoryOne stock position across every warehouse and branch, updated as goods actually move.
AccountingPost entries automatically, reconcile the bank, and close the month without rebuilding it in Excel.
Related terms
Three-way match
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Cost of goods sold (COGS)
Cost of goods sold is the direct cost of the products you sold in a period. It is what you subtract from revenue to get ...
FIFO vs weighted average costing
FIFO values the stock you sold at the cost of the oldest units you bought. Weighted average values it at the blended cos...