Landed Cost Calculator: The Short Answer
A founder is offered hoodies at £10 FOB and sees a clear route to a £25 wholesale price. Before celebrating, run the landed cost calculator. On 1,000 pieces, add £800 freight, £50 insurance, £1,085 of duty at a placeholder 10%, £315 of handling and clearance and £250 for inspection and packing, and the cost rises to £12,500, or £12.50 a piece. That is a quarter more than the FOB price, and it is the number the wholesale price has to be built on.
The example is illustrative, and your own freight, duty and handling will differ. What does not change is the principle: price from the landed cost, not from the factory quote. The calculator makes that quick enough to do for every style and every quantity you consider.
Use the Landed Cost Calculator for Clothing
Enter the number of pieces and the FOB price per piece, then the totals for freight, insurance, handling and inspection. Add the duty rate you found in the Trade Tariff, and choose how to treat import VAT. The landed cost calculator for clothing returns the cost per piece, the total, the multiple of FOB that the landed cost represents and a line-by-line table you can copy into your costing sheet.
Landed cost calculator
FOB price to landed cost per piece
Estimate only. Duty is a placeholder, import VAT is shown for the standard rate, and you should confirm every line with your agent or forwarder.
Try changing the order quantity. Freight and handling are shared across the pieces, so the landed cost per piece usually falls as the quantity rises, though the factory price may change with quantity too. The multiple of FOB is a handy sanity check: if it is far outside what you expected, one of the totals deserves a second look.
What Goes Into Landed Cost
Landed cost is everything it costs to get one finished garment into your warehouse, ready to sell. It begins with the FOB price and grows with each step of the journey. The list below follows the order in which the costs arrive.
Landed cost components
| Component | When it arises | How to estimate it |
|---|---|---|
| Goods at FOB | Factory invoice | Quote × pieces, including trims and packing if quoted |
| International freight | Sea or air to the UK | Forwarder quote for the consignment |
| Insurance | In transit | Policy cost or a quote for the cargo value |
| Import duty | At the border | Customs value × duty rate for the commodity code |
| Import VAT | At the border | VAT value × rate; often recoverable for VAT-registered buyers |
| Handling and clearance | Port and after | Agent and haulier quotes |
| Inspection and testing | Before shipping | Inspector and laboratory quotes |
A checklist of components. Your own consignment may have more or fewer lines.
Our guide to landed cost for clothing imports to the UK explains each element in more depth, and the customs value calculator shows how the duty base is built.
Duty, VAT and the Landed Cost
Duty always belongs in landed cost because it is a real cost of bringing the goods in. Import VAT is different. For a VAT-registered business that can recover it, it is a cash-flow item, paid at the border and reclaimed later, so it does not belong in the cost of the garment. For a business that cannot recover it, VAT is part of the cost and should be included. The selector in the calculator switches between the two, which is why the example shows £12.50 or £14.95.
Whether import VAT is recoverable depends on your registration and how you account for it, so ask your adviser. Look up the duty rate for each style in the UK Trade Tariff, and see how the VAT value is built in the GOV.UK guidance on working out the VAT value of imported goods.
Our import tax calculator for the UK estimates both taxes from your invoice, if you want to see the working before you enter the totals here.
Where the Money Goes in the Example
The pie divides the £14,950 total cost of the example when import VAT is not recoverable. It shows how much of every pound goes to the garment itself and how much is added by the journey.
Illustrative split of a £14,950 landed cost with non-recoverable import VAT
- Goods at FOB66.9%
- Freight and insurance5.7%
- Import duty7.3%
- Handling, inspection and packing3.8%
- Import VAT16.4%
Illustrative. £10,000 goods, £850 freight and insurance, £1,085 duty, £565 handling, inspection and packing, and £2,450 import VAT, totalling £14,950. Shares rounded to one decimal place.
Freight, insurance and duty together make up about 13% of the total in this example, and import VAT makes up about 16%. If you can reclaim the VAT, your cost base shrinks by that last slice. Either way, the factory price is only about two-thirds to four-fifths of what you actually spend.
How Quantity Changes Landed Cost per Piece
Fixed costs such as clearance and inspection are spread across the order, so larger orders dilute them. The chart holds the FOB price at £10 and the variable freight and duty per piece constant, and shows how fixed costs of £565 per consignment weigh on the cost per piece at different quantities.
Fixed costs per piece at different order quantities
Fixed costs per piece
Illustrative arithmetic: £565 of handling, clearance, inspection and packing divided by the number of pieces. Variable freight and duty are held constant and left out.
This is one reason first orders cost more per piece than repeats. If your minimum quantity is a stretch, compare the landed cost per piece at two quantities before deciding, using the landed cost calculator for clothing above, and weigh the saving against the stock you would carry.
Landed Cost Examples: Sea Freight and Air Freight
Freight mode is one of the biggest levers on landed cost, because it sits inside the customs value and so raises duty and VAT as well. The table runs the example order through both modes with the same goods, duty rate and handling, and only the freight changed. Use it as a pattern for your own comparison in the landed cost calculator.
The same order landed by sea and by air
| Line | Sea freight | Air freight |
|---|---|---|
| Goods at FOB | £10,000 | £10,000 |
| International freight | £800 | £3,000 |
| Insurance | £50 | £50 |
| Import duty at a placeholder 10% | £1,085 | £1,305 |
| Handling, clearance, inspection and packing | £565 | £565 |
| Total landed cost, import VAT recoverable | £12,500 | £14,920 |
| Landed cost per piece on 1,000 pieces | £12.50 | £14.92 |
Illustrative freight costs and a placeholder duty rate; neither is a quote. Import VAT is treated as recoverable in both columns.
Air freight adds £2.42 to each piece in this example, about 19%, and that gap shrinks or grows with the freight rates you are quoted. It is not an argument for or against air; a late season can justify it. The point is that the cost per piece, not the headline freight bill, is the right basis for the decision, and the landed cost calculator gives you that figure in a few seconds for each option.
Four Steps to a Trustworthy Landed Cost
A repeatable routine keeps landed cost comparable across styles and suppliers, and makes it quick to update when a quote changes.
Building landed cost per piece
- 1Start from FOBUse the quoted price per piece and confirm what it includes.
- 2Add delivery costsFreight, insurance and handling from real quotes.
- 3Add duty and VATUse the commodity code rate, and decide on VAT treatment.
- 4Divide by piecesCompare the result with the FOB price and your selling price.
Keep the assumptions with the result. A landed cost without its freight rate and duty code is hard to reuse next season, and a note takes seconds to write. Save each calculation next to the quote it came from, and update it when freight, duty or exchange rates move, so the landed cost calculator figure you quote to customers is always the current one, not the one from the last season.
Using Landed Cost to Price and Reorder
Once you have a landed cost per piece, it feeds everything else. Apply a markup with our clothing markup calculator to reach a selling price, build the cost from components with the garment costing calculator, or work out how freight affects each piece with the shipping cost per garment calculator. For the factory side of the price, our guide to clothing manufacturing cost explains what drives it.
Before you rely on a landed cost
- Confirm what the FOB price includes and excludes
- Use current freight and insurance quotes, not old ones
- Look up the duty rate and confirm any preference
- Decide whether import VAT is recoverable for you
- Include inspection, testing and packing you pay for separately
- Ask an agent or forwarder to sense-check the totals
A practical checklist. Rates and rules change, so use current official and carrier sources.
How Ruhrose Helps You Land a Cost You Can Plan On
Ruhrose develops hoodies, fleece, jersey, denim and woven casualwear for UK buyers, with production in Bangladesh. We state clearly what our quote includes, sample before bulk and help you avoid late changes that add cost after the price is agreed. See Ruhrose's clothing manufacturing pages for what we make, then bring your target landed cost and we will talk through what is realistic.
Before you fix a selling price, ask yourself one question: would you still be comfortable with this margin if freight rose by a quarter?