Landed Cost for Imports from Bangladesh: How to Calculate the Real Cost Per Unit

If you import from Bangladesh, the supplier price is only the first line of what the goods cost you. Landed cost is the total cost of getting goods from that price to your own warehouse, divided by the good units you actually receive. This guide explains every cost line, gives you a calculator table for a spreadsheet, works through an example with all figures labelled as illustrative, and shows how to use the result for pricing.

What landed cost means

A supplier quotation states what the seller charges on the terms in that quotation, set by the Incoterms rule named in the quote. The Incoterms rules are eleven three-letter trade terms first published by the International Chamber of Commerce (ICC) in 1936, and they clarify the tasks, costs and risks involved in delivering goods from sellers to buyers.¹ The current edition, Incoterms 2020, entered into force on 1 January 2020.¹

The rules describe obligations, risk and costs: who organises carriage or insurance, where risk transfers from seller to buyer, and which party pays which costs.² An FOB Chattogram price and an EXW price for identical goods therefore start from different places. The rules do not impose tariffs, and they are not a substitute for a contract of sale.²

Landed cost converts every quote to the same finish line: goods cleared through customs and in your warehouse, ready to sell. That is the only basis on which you can compare suppliers fairly, or set a price that leaves a profit. Calculate for your own order size, destination and tax position, because several lines are fixed per shipment, not per unit.

The landed cost formula

Add every cost of the shipment together, then divide by the number of good units received.

Total landed cost = product cost + origin costs not in the price + freight not in the price + insurance + import duty + non-recoverable import taxes + broker fees + destination charges + inland delivery + inspection + bank and currency costs

Landed cost per unit = total landed cost divided by good units received

Good units matters. If part of the order fails inspection or arrives damaged, your saleable quantity is smaller than the quantity ordered, and the cost per saleable unit is higher. Price on expected good quantity, not ordered quantity.

Every cost line, explained

1. Product cost

The supplier unit price multiplied by the quantity ordered, on the Incoterms basis in the quotation. Always record the basis with the price. A usable record reads USD 2.50 per unit, FOB Chattogram, Incoterms 2020. The ICC advises traders to state the chosen rule, the named place and the edition in the contract itself.² Convert foreign-currency quotes at your bank actual rate, including its margin.

2. Origin costs in Bangladesh

Under EXW, you pay to collect the goods, transport them to the port or airport, and clear them for export. Under FOB and later rules, the seller covers those steps inside the price, so you do not add them again. When you compare EXW with FOB, ask a forwarder to price the origin leg so the comparison is like for like.

3. Main freight

The main international carriage by sea, air, rail or road to your country. Under EXW and FOB you arrange and pay it. Under the C rules the seller contracts for carriage beyond delivery to the named destination, and under the D rules the seller organises carriage to the named place.² Even when freight sits inside the price, ask what it covers, because destination handling is sometimes billed again on arrival. Use a real forwarder quote for your route, dates and volume.

4. Cargo insurance

Insurance covers loss or damage in transit. Under CIF, insurance arranged by the seller forms part of the price, and each Incoterms rule sets out insurance obligations in a dedicated article.² Check the level of cover named in your contract before you ship, and budget for a top-up if it does not match the value and risk of your goods. Under EXW and FOB, insurance is your cost. Skipping it moves the full loss onto you.

5. Import duty

Duty is charged by your own country, normally as a percentage of the customs value. The rate depends on the product classification, the customs value and the origin of the goods. There is no single Bangladesh duty rate to copy into your calculation, and this guide prints no rate for that purpose. A copied rate is the most dangerous figure in the calculation, because a wrong classification or an out-of-date rate produces a confident, wrong total. Complete the duty line from your destination country official tariff, confirmed by a customs broker, before you price.

6. Import VAT, GST and other import taxes

Many countries charge VAT, GST or a similar tax at import. If you are registered and can reclaim it, the tax is a cash-flow item, paid at the border and recovered through your return, not a final cost, so leave it out of landed cost. If you cannot reclaim it, add it in full. Confirm the treatment with your accountant or tax authority.

7. Customs broker fees

A broker prepares and files your import declaration, checks classification and valuation, and handles customs queries. Fees are normally charged per shipment or per declaration. Obtain the broker fee schedule in advance, including charges for extra tariff lines or examinations.

8. Destination port and terminal charges

On arrival, the port, terminal or handling agent charges for unloading, handling, documentation and release. Late container collection can also attract storage and demurrage. Confirm which charges the freight already covers and which will be billed on arrival. One question to the forwarder before shipment usually prevents this surprise line.

9. Inland transport to your warehouse

The final leg runs from the arrival port, airport or customs warehouse to your premises, including unloading where that is your responsibility. Get a haulier quote for the actual address and vehicle size, and include any third-party warehouse receiving fees.

10. Inspection and testing

Pre-shipment inspection, during-production checks and laboratory testing protect you against paying in full for goods that miss the specification, so their cost belongs in landed cost. Budget the quoted fee, plus re-inspection if a first inspection fails. Skipping inspection removes a small, known cost and raises the risk of a large, unknown one.

11. Bank and currency costs

Transfer fees, letter of credit charges, document-checking fees and the exchange-rate margin all add to the true cost of the order. Ask your bank for its charges on the agreed payment method and include them. On a large order, currency movement between quotation and payment can exceed several other lines combined.

12. Costs that are easy to forget

Depending on the product and market, you may also need compliance testing and certification, labelling or repacking, fumigation, bonded warehousing, and returns or disposal for unsaleable goods. None applies to every shipment, which is why they are forgotten. Work through the checklist at the end of this guide for every new product.

The landed cost calculator table

Copy this table into a spreadsheet and fill it in from your own quotations and official sources only.

Worked example with example figures

This example shows the method only. Example figures: every figure below is illustrative. The figures are not a real price, freight rate or charge for any product, route or country. The duty line is left for you to complete from an official tariff, because no duty rate printed in an example can be correct for your product and your country.

A buyer orders 10,000 knit T-shirts quoted FOB Chattogram, Incoterms 2020, into a market where import VAT is reclaimable, so VAT is left out of the total.

Before duty, each shirt already costs 2.81 against a quoted 2.50, more than twelve percent higher, from freight and shipment charges alone. Add your duty figure divided by 10,000 for the final landed cost per unit. That is the number you price from. Pricing from 2.50 would give away the freight, inspection, broker and delivery cost, and the duty, out of profit.

How Incoterms rules change which lines you pay

The Incoterms rule decides which lines are already inside the price and which lines you must add. In the F rules the buyer arranges carriage beyond delivery, while in the C rules that obligation falls to the seller.² Import clearance and duty stay with the buyer under the rules in this table. DDP is the exception: under DDP the seller takes on obligations inside the buyer country, including import clearance, which is why the ICC advises sellers to consider DAP or DPU instead where those obligations are hard to perform.² For the full comparison, see our guide to Incoterms for shipments from Bangladesh, and the term guides for CIF (Cost, Insurance and Freight) and FOB (Free On Board).

Never compare suppliers on unit price alone when they quote on different rules. Convert both quotes to landed cost first.

Where to find your duty rate

Follow these steps for every product and destination country. Never reuse a rate from a previous product.

1. Classify the product. Find its Harmonized System (HS) code. The HS is governed by the International Convention on the Harmonized Commodity Description and Coding System, adopted in June 1983 and in force from January 1988, and HS 2022 is the seventh edition of the nomenclature, used worldwide for the uniform classification of goods traded internationally.³ Only the first six digits are harmonised worldwide. Your country extends them into a longer national code that sets the duty rate. Our guide to HS codes and how to classify your product covers classification in detail.

2. Look the code up in your destination country official tariff. National tariffs follow the same code-by-code structure. Bangladesh Customs publishes its harmonised tariff by chapter and heading, with longer national codes for each article description.⁴ The Bangladesh Customs Tariff First Schedule lists a separate statutory rate of customs duty on import for each HS code, and the rate differs from code to code within a single chapter.⁵ Your destination tariff works the same way. As one destination example, the United States International Trade Commission (USITC) provides an interactive Harmonized Tariff Schedule search tool covering all HTS chapters, with tariff data downloadable in several formats.⁶

3. Check for a lower preferential rate. Check whether a preference scheme covering Bangladesh reduces the rate, and what proof of origin the supplier must provide. An undocumented preference cannot be used.

4. Check for extra duties. The tariff also shows anti-dumping, countervailing or safeguard duties where they apply, on top of the normal rate.

5. Confirm the customs value. Check whether your country includes international freight and insurance in the dutiable value. This decides which subtotal the rate applies to. Countries define customs value differently, and preferences may reduce duty while additional duties may apply, so check both points in the tariff.

6. Have a broker confirm both points. Classification and valuation are the most common sources of costly error. Broker confirmation before you price is inexpensive protection against a reassessed duty bill.

How to use landed cost for pricing

Landed cost is the floor of your pricing, not the price itself. Work outward from it in a fixed order.

Step 1: Fix the cost per saleable unit. Use good units received, and complete every line of the calculator table. Where a line is zero because the Incoterms rule includes it, write included. A blank can mean forgotten.

Step 2: Add other per-unit costs. Storage, picking and packing, sales commissions, outbound delivery, packaging, and an allowance for returns and unsold stock sit on top of landed cost, in a separate block so the import cost stays visible.

Step 3: Apply margin correctly. Margin and markup differ. A 30 percent markup on cost is a smaller share of the final price than a 30 percent margin. Decide which measure your business targets and use it consistently.

Step 4: Test the price against the market. If the price sits above what the market will pay, do not simply cut the margin. Look for real reductions: a larger or consolidated shipment, a different Incoterms rule, another forwarder routing, or a specification change the customer will accept.

Step 5: Recalculate when anything changes. Freight is seasonal, currencies move, tariffs are revised and suppliers requote. A landed cost is valid only for its quotation, route and date. Rebuild it for every order, and quote customers from the rebuilt figure, never from the supplier price. Our overview of how to import from Bangladesh covers the wider process.

Common mistakes and a final checklist

The most common mistakes are pricing from the unit price alone, comparing quotes given on different Incoterms rules without converting them, copying a duty rate from another product or country, and leaving fixed per-shipment charges out on a small order. Each mistake makes the total look lower than the cost you will actually pay.

Before accepting any quotation, confirm each point in writing:

• The Incoterms rule, named place and edition in full, for example FOB Chattogram, Incoterms 2020.

• Currency, price, quantity, specification and validity.

• A freight quote for the same route, dates and cargo size.

• What insurance applies and who holds the policy.

• Broker confirmation of classification and duty treatment.

• Whether import VAT or GST is reclaimable in your position.

• Destination charges, and what seller-arranged freight covers.

• Inspection budgeted, with a re-inspection allowance.

• Payment terms, with bank charges included.

• The completed calculator table saved with the order file.

Frequently asked questions

What is landed cost in simple terms?

Landed cost is the full cost of an imported product by the time it reaches your warehouse, divided by the good units you receive. It is the supplier price plus every charge that price does not already include: freight, insurance, duty, broker fees, port charges, inspection and delivery.

Does landed cost include import duty?

Yes, landed cost includes import duty as a main cost line. Duty is the customs value multiplied by the rate for the product classification code in your destination country official tariff. Look your rate up in that tariff and have a broker confirm it before you price.

Does a CIF price already give me the landed cost?

No, a CIF price does not give you the landed cost. CIF includes the goods, main freight and seller-arranged insurance to the named destination port. Import clearance, duty, import taxes, destination charges the freight does not cover, and delivery to your warehouse must still be added.

Should I include import VAT in landed cost?

Include import VAT in landed cost only if you cannot reclaim it. If you are registered for VAT or GST and can recover import tax through your return, treat it as cash flow and leave it out. If you cannot reclaim it, include it in full, and confirm your position with your accountant.

How do I find the duty rate for my product?

You find the duty rate by classifying the product under the Harmonized System, extending the code to your country full national code, and looking that code up in your country official tariff. Check the same source for preferential rates and extra duties, confirm how your country defines the customs value, and ask a broker to verify both points before you price.

Why is my landed cost per unit higher on a small order?

Your landed cost per unit is higher on a small order because several charges, including broker fees, inspection and delivery, are fixed per shipment rather than per unit. Divided across a small quantity they add a large amount to each unit. Always calculate for the quantity you are actually ordering.

How often should I recalculate landed cost?

Recalculate landed cost for every new order. Freight changes with season and route, exchange rates move, tariffs are revised and suppliers requote. Refresh the figures from current quotations and the current tariff before you commit to a price.

Can two suppliers with different prices have the same landed cost?

Yes, two suppliers with different prices can have the same landed cost, and the cheaper-looking quote is not always the cheaper supplier. A low EXW price leaves you paying origin transport and export handling yourself, while a higher FOB or CIF price already includes those legs. Landed cost, for the same destination and quantity, is the reliable comparison.

Next steps on Exportain

Exportain is a B2B marketplace where buyers find Bangladeshi suppliers and trade service providers, compare quotations and place orders. Exportain is not a party to the contract for goods, and it does not inspect goods, book freight or clear customs, so use this calculator on every quote you receive. Browse Bangladeshi suppliers, post an RFQ stating your destination and delivery terms so suppliers respond on a comparable basis, and read how to buy before you place a first order.

Incoterms is a trademark of the International Chamber of Commerce.