True Landed Costs
The total cost of a landed shipment may not equal the price listed on the purchase order because of freight, insurance, rebates, or other costs or adjustments. Landed Costs, or the "all in" costs of materials and inventory on the shelf, are very important for understanding true cost of product and margins.
Essentially, a landed cost is a product cost that is inclusive of not just the cost of the material that is paid to the vendor, but all of the costs incurred in getting it to your shelf. Typical landed costs include inbound ocean freight, duties and fees paid, internal processing, hauling charges, or even guaranteed rebates from a vendor.