How to calculate landed cost for Amazon FBA wholesale

The supplier's price is not what a product costs you. By the time a unit sits in Amazon's warehouse ready to sell, you have also paid for freight, duty, prep, labels and the shipment to Amazon. That total is your landed cost, and it is the number every profit and ROI figure should start from. Here is how to calculate landed cost for Amazon FBA, per unit.

What goes into landed cost

• Supplier price: the price per unit on the invoice, after any discount.
• Customs duty: for imported goods, usually a percentage of the product's value. Check the rate for your product's tariff code.
• Freight from the supplier: delivery to you or to your prep center.
• Prep: poly bags, bubble wrap, bundling or the prep center's fee per unit.
• Labels: the FNSKU barcode label and the time or fee to apply it.
• Inbound shipping to Amazon: the carrier cost to the fulfillment center, and Amazon's inbound placement fee where it applies.
• Other: anything else you pay per unit, such as payment fees to the supplier or currency conversion.

Turn shipment costs into a cost per unit

Freight and inbound shipping are billed per shipment, not per unit. Divide each bill by the number of units in the shipment. A $120 freight bill for 300 units is $0.40 per unit. When one shipment holds very different products, split the cost by weight or by volume instead of by unit count, so heavy items carry their real share.

The formula

Landed cost = supplier price × (1 + duty rate) + freight + prep + labels + inbound + other, all per unit.

A worked example

Supplier price	$10.00
Customs duty (5%)	$0.50
Freight from supplier ($120 ÷ 300 units)	$0.40
Prep and poly bag	$0.30
FNSKU label	$0.10
Inbound shipping to Amazon	$0.35
Landed cost	$11.65

Why it changes the answer

Say the product sells for $24.99 and Amazon's referral and FBA fees come to $7.90, leaving a payout of $17.09.

• Against the supplier price alone: profit $7.09, ROI 70.9%.
• Against the landed cost: profit $5.44, ROI 46.7%.

The product is still a good buy, but the real return is a third lower than the quick calculation. On a product with a thinner margin, the difference turns a BUY into a loss. Sellers who judge on supplier price are the ones surprised when the payouts arrive. See how to check if a product is profitable on Amazon FBA for the full calculation.

What is not part of landed cost

Monthly storage fees, returns and advertising happen after the product arrives, and they depend on how fast it sells. Keep them out of the landed cost, but leave room for them in your targets: a slow seller pays storage for longer. That is one reason to avoid dead stock.

Use landed cost to set your supplier price

Work backwards and landed cost tells you what you can pay. Take the highest landed cost that meets your ROI target, subtract your per-unit costs, divide by (1 + duty rate), and you have the highest supplier price that still works. That is your maximum buy cost, and the number to take into a negotiation.

Set it once, use it on every product

In Wholesale Analyzer you enter your costs once in the wholesale settings: shipping from the supplier, prep, labels, inbound to Amazon, other costs per unit and customs as a percentage. Every scan then shows net profit and ROI on the landed cost, next to the plain supplier-price figures, and the max buy cost already has your costs taken off.