In a nutshell: Landed Costs

Landed costs are the total costs of an item when it is “landed” at its destination. In addition to the purchase price of the item, landed costs also include all other costs incurred on the way from the supplier to the recipient’s goods receipt. This includes customs duties, taxes and levies; if applicable. also anti-dumping duties or other countervailing duties.

Our tip:

In practice, landed costs are often only reduced to these costs directly associated with the procurement or delivery process. Especially when comparing costs between items from different procurement markets, landed costs must also take into account costs that are indirectly related to the procurement market and supplier behavior. These include, for example, changes in inventory costs due to changes in delivery times or minimum lot sizes. These can account for a significant proportion of landed costs.

Picture of Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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