E-commerce · Economics
Landed product cost model
Published · Reviewed by The Diligence Standard Team · Updated
Product cost includes purchase price, freight, duty, insurance, brokerage, inspection and inbound handling.
Records to reconcile
- Supplier prices and incoterms
- Freight and customs entries
- Inbound receiving cost
Warning signal
Management uses invoice cost while material landed costs sit elsewhere.
Transaction impact
Gross margin and reorder cash needs are understated.
Response
Rebuild landed cost by SKU and stress current freight, duty and currency terms.