A quote for shelves or a shopping cart can look great until it gets to the US. Freight, duties, tariffs, customs fees, and inland delivery can change the numbers quickly. If we only compare suppliers by unit price, we may miss the number that matters: total landed cost.
Total landed cost is the total cost of getting store fixtures from the supplier to where they’re supposed to be. A simple landed cost formula is: Product Cost + International Freight + Insurance + Customs Duties/Tariffs + Import Fees + Inland Transportation + Handling/Overhead = Total Landed Cost. For imported shelves and shopping carts, figuring these costs out before ordering gives retailers a better way to compare suppliers and plan budgets.
So, how does this work when you’re actually ordering store fixtures? In the next few paragraphs, I’ll break down the math and show you what costs U.S. buyers need to consider.
What Is the Total Landed Cost of Store Fixtures?
The total landed cost is more than what you see on a supplier’s quote.
For example, let’s say we at RedSheep give a retailer a quote on a shipment of store shelves or shopping carts. Depending on the agreed Incoterm, that product price might not include all the expenses it takes to move the fixtures through the supply chain and get them to the buyer’s final destination.
For an importer, the calculation may include:
- Product cost
- Export and international transportation
- Cargo insurance
- Customs duties and applicable tariffs
- Customs brokerage and import fees
- Port or terminal charges
- Inland transportation
- Handling and other relevant overhead
This matters when you’re comparing suppliers.
Supplier A might give you a lower factory price, but if their packaging is terrible, you could end up using way more container space. Supplier B might have a slightly higher unit price but better packaging and container loading.
Option two might actually have the lower total landed cost.
That’s why we tell people to look beyond the price on the quote when they’re evaluating store fixtures.
How Do You Calculate the Total Landed Cost?
A useful landed cost formula is:
Total Landed Cost = Product Cost + Freight + Insurance + Duties/Tariffs + Import Fees + Inland Transportation + Other Costs
Let’s look at each part.
1. Product Cost
Start with what you pay for the fixtures.
For shelves, this could include uprights, shelves, brackets, base decks, back panels, accessories, and packaging.
For shopping carts, it could include the cart itself plus accessories or custom components.
Make sure you know the Incoterm on the quote. An EXW quote and an FOB quote, for example, do not mean the same logistics responsibilities or cost structure.
2. International Freight
International shipping can be a big expense for store fixtures because most of them are big and take up a lot of space.
When you’re shipping by ocean, you need to think about not just the freight rate but also how much of the container you’re using.
How many shelf pieces can you fit in the container? How well can you nest or pack shopping carts? Are you shipping empty space?
That’s why packaging design can affect landed cost even if the product itself doesn’t change.
3. Cargo Insurance
Cargo insurance protects against covered loss or damage during transit.
It may look like a small line item compared to the value of a container, but it should still be included when calculating the actual landed cost.
4. U.S. Customs Duties and Tariffs
This is an area where procurement teams need up-to-date information.
The amount payable can depend on factors such as the product’s classification, customs value, country of origin, and applicable U.S. trade measures.
Before placing an order, identify the appropriate HTS classification and verify the current duty and tariff treatment.
We do not recommend assuming a rate from an old shipment or online article still applies. Trade measures can change.
For a significant shipment, working with a qualified customs broker or other trade professional can help verify the applicable requirements.
5. Customs Clearance and Import Fees
Importing doesn’t just mean paying customs duty.
Depending on your shipment, you may have to pay for customs brokerage, government fees, terminal or destination charges, documentation, and other clearance-related expenses.
Ask your freight forwarder or customs broker which charges apply to your shipment and Incoterm.
6. Inland Transportation
Your stuff still has to get from the U.S. port or terminal to wherever you’re going.
That could be:
- A distribution center
- A warehouse
- A consolidation facility
- A new store
- A remodeling project
The final transportation cost can be affected by distance, what you need to move, when you need to move it, and how you need to move it.
7. Handling and Other Costs
Some expenses are more of a surprise.
Depending on what you’re shipping, these could include storage, inspections, demurrage or detention, special handling, or other supply-chain expenses.
Not every shipment has them, but procurement teams need to know the risks when they’re building a realistic budget.
How Do I Calculate the Landed Cost of an Item?
Once you know the total landed cost of your shipment, you can calculate a landed cost per unit.
For a shipment with only one type of shopping cart, the calculation is simple:
Landed Cost per Cart = Total Landed Cost ÷ Number of Carts
If you have 500 shopping carts that are all the same and the total landed cost is $50,000.
The calculation would be:
$50,000 ÷ 500 = $100 per cart
This $100 is a much more useful cost benchmark for procurement than the supplier’s $90 product price.
The math gets a little more complicated if your shipment has different products.
What Is a Landed Cost Example for Store Fixtures?
Here’s a simple landed cost example to illustrate.
So you’re a U.S. retailer and you just got in a mixed shipment of RedSheep gondola shelving and shopping carts:
Cost | Example Amount |
Products | $40,000 |
International freight | $5,000 |
Cargo insurance | $200 |
Duties/tariffs | $4,000 |
Customs/import charges | $800 |
Inland transportation | $1,500 |
Other handling costs | $500 |
Total landed cost | $52,000 |
These numbers are hypothetical and are not current freight, duty, or tariff quotes.
In this example, you’re not making a $40,000 purchasing decision. You’re making a $52,000 purchasing decision.
Additional landed costs equal:
$52,000 – $40,000 = $12,000
That difference can make a big difference when you’re comparing suppliers, budgeting for store openings, and making purchasing decisions.
How Do You Calculate Landed Cost for Multiple Items?
This is especially important when it comes to store fixtures.
Let’s say you have a container that has both shelving and shopping carts. If you take that $5,000 freight bill and divide it by the number of items you’re shipping, you might get a distorted result because different products take up different amounts of container capacity.
There are a few different ways you can allocate shared costs:
By quantity: This works well when the products are very similar.
By product value: Each product gets a piece of the cost based on how much you paid for it.
By weight: This is good when weight is the main thing that drives the transportation cost.
By volume (CBM): This is a good one to think about when you’ve got big, bulky products because it reflects how much of that container space each product is taking up.
There’s no one-size-fits-all method that’s perfect for every cost. The method should reasonably reflect what drives that particular expense and be consistent with your accounting practices.
With shelving and shopping carts, we pay close attention to how we package and utilize containers because it’s not free to ship empty space.
How Do You Calculate the Landed Cost of Imported Goods in Excel?
You don’t need fancy software to make a good landed cost calculator template.
The basic landed cost formula in Excel is just adding up the relevant cost cells.
If you have multiple products, you need to decide how you’re going to allocate shared costs such as freight and insurance. Then your spreadsheet can divvy up those costs based on value, weight, quantity, CBM, or some other reasonable method.
This also answers a common question about how to calculate the landed cost of imported goods in Excel: build the model around the whole supply chain rather than just putting in product price and freight.
How Do You Calculate Landed Cost Percentage?
A landed cost percentage can help you see how much extra cost you’re adding to the product purchase price.
One useful calculation is:
Additional Landed Cost % = Additional Landed Costs ÷ Product Cost × 100
Using our hypothetical example:
$12,000 ÷ $40,000 × 100 = 30%
In this example, costs beyond the products themselves add 30% to the product purchase cost.
This percentage can be helpful for budgeting and comparing sourcing scenarios, but don’t assume you’ll have the same percentage for every order. Freight rates, tariff treatment, product mix, container utilization, and other factors can change.
What Is the Difference Between Purchase Cost and Total Inventory Cost?
Purchase cost is the amount you paid to get the product.
Landed cost gives you a bigger picture by adding the costs to bring imported goods to your defined destination.
A retailer’s internal total cost of inventory or project cost might go further. Depending on how the company measures costs, it could include warehousing, internal handling, assembly, installation, deployment to stores, and other operating expenses.
Define your endpoint before calculating.
“Landed at the U.S. port,” “delivered to our distribution center,” and “installed in the store” are three different cost endpoints.
What Costs Do Retailers Commonly Miss When Importing Store Fixtures?
From a procurement standpoint, small assumptions can create big differences across a full fixture program.
Costs worth checking include:
- Incorrect or outdated duty/tariff assumptions
- Poor container utilization
- Destination and terminal charges
- Customs examinations or inspections
- Storage and potential demurrage/detention
- Inland delivery requirements
- Special unloading or delivery arrangements
- Replacement or spare components
- Assembly or installation where applicable
The best time to identify these costs is before you start comparing final supplier proposals, not after the fixtures are already moving.
How Can You Reduce the Landed Cost of Shelving and Shopping Carts?
Not every time you want to reduce landed cost, you have to go to the manufacturer and ask them to lower the price of the product.
When it comes to bulky retail fixtures, we often need to look at the entire order.
Better packaging can improve container utilization. Consolidating different store fixture products may improve logistics efficiency. Accurate documentation can reduce avoidable clearance problems. Choosing an appropriate Incoterm can also make responsibilities and cost comparisons clearer.
For procurement managers, the key is to compare suppliers on an apples-to-apples basis.
At RedSheep, we believe the useful question isn’t simply, “How much does this shelving or shopping cart cost?”
It’s:
“How much will it cost to get the fixtures where we actually need them?”
Once you consistently calculate that number, you have a much stronger foundation for comparing sourcing options.
Conclusion
When you calculate total landed cost, you get a better idea of what your store fixtures are actually going to cost you. By factoring in product price, freight, duties and tariffs, import fees, inland transportation, and other expenses, you can avoid surprises and make more accurate supplier comparisons. Most importantly, this approach helps you make better decisions when it comes to buying shelving, shopping carts, and other store fixtures.
Which landed-cost strategy from today’s post will you try first—calculating costs per item, improving container utilization, or building a landed cost spreadsheet?
Contact RedSheep today to talk to our team about your store fixture needs.
