When I started sourcing private label products on Alibaba, the supplier's quote was the number I got excited about. Ninety cents a unit for something that sells for $15 looks like a sure thing. Then you add freight, duties, the customs broker, labels, and the trip to Amazon's warehouse, and the 90 cents is two dollars and change. Sometimes the product still works. Sometimes it doesn't.
I ran this exact math on two products recently. Bamboo soap dishes didn't pass once everything was added up. Space-saving "magic" hangers did, and I moved forward with them. The difference wasn't the supplier price. It was everything after it.
What goes into landed cost
| Cost | What it is | How to estimate |
|---|---|---|
| Unit price | What the supplier charges | Supplier quote at your order quantity |
| Packaging and customization | Logo printing, retail boxes, inserts | Ask for it as a separate line |
| Freight | Getting goods from the factory to the US | Quote by weight and volume, air or sea |
| Duties and tariffs | Import taxes on the goods | HTS code rate × customs value |
| Customs and broker fees | Clearing the shipment | Flat fees per shipment, often bundled by forwarders |
| Prep and labeling | Barcodes, poly bags, bundling | Per unit, from your prep center or your own time |
| Inbound to marketplace | Shipping to FBA or WFS, placement fees | Per unit from your shipping quotes |
Step by step
1. Get the real unit price
Alibaba listings show price ranges by quantity. The low number is usually for a quantity you're not ordering. Ask for a quote at your actual order size, and ask whether it's EXW (you pick it up from the factory), FOB (they deliver it to the port), or DDP (delivered to you with duties paid). Those terms change what's included.
2. Get the carton details
You need the units per carton, carton dimensions, and carton weight. Freight is priced on the greater of actual weight and volumetric weight, so a light but bulky product can cost a lot to ship. Ask the supplier for these numbers before you request freight quotes.
3. Price the freight
For a first order, express air (through couriers or a forwarder's air service) is simple and fast. For larger reorders, sea freight is far cheaper per unit but slower. Get quotes for both if your order is borderline, and make sure the quote says whether it includes customs clearance and delivery to your door or to Amazon.
4. Look up the duty rate
Every product has a Harmonized Tariff Schedule (HTS) code that sets its duty rate, and imports from some countries carry additional tariffs on top. US tariff rates on Chinese goods changed several times in 2025 and 2026, so look up your product's current rate on the US International Trade Commission's HTS search or ask your freight forwarder. Don't use last year's number.
Also note: the $800 de minimis exemption that used to let small shipments in duty-free was suspended for all countries in August 2025. Small test orders pay duties now too.
5. Add prep and inbound
FBA and WFS require each unit to have a scannable barcode, and some products need poly bags or bundling. Amazon ended its own prep service at the start of 2026, so either the supplier does it (cheapest, ask for it), a prep center does it, or you do. Then add the per-unit cost of shipping to the fulfillment center plus any placement fee.
6. Divide by sellable units
Add everything up and divide by the number of units you expect to actually sell, not the number ordered. If a few percent arrive damaged or fail inspection, they still cost you money.
An example
Here's a typical small first order: 500 units of a light household gadget, air freight, with an illustrative duty amount (yours will depend on the HTS code).
The $1.20 product costs more than twice that by the time it can sell.
Now plug $2.49 into your pricing, not $1.20. If this sells for $14.99 on FBA in large standard under 4 oz, Amazon takes about $2.25 in referral and $3.86 in fulfillment with the surcharge. That leaves about $6.39 profit per unit before ads, a 43% margin. Good product. If it sold for $8.99 instead, it would net about $2.18 even with Amazon's low-price fulfillment rate, and a little ad spend would erase it.
Working backward: the maximum you can pay
Better than calculating landed cost after you find a supplier is setting a ceiling before you start negotiating:
- Find the realistic selling price from current listings.
- Multiply by (1 − marketplace fee % − your target margin).
- Subtract fulfillment, inbound, and prep per unit.
- Subtract your freight and duty estimate per unit.
- What's left is the most you can pay the supplier.
Going into a negotiation knowing your ceiling makes the decision easy. It also helps you see which lever matters. For some products, a smaller carton saves more than a lower unit price.
Common landed cost mistakes
- Using the price for 5,000 units when you're ordering 500.
- Forgetting packaging customization, which suppliers often quote separately.
- Ignoring volume. Bulky, light products cost far more to ship and store than their weight suggests. On marketplaces, they also land in more expensive fulfillment tiers.
- Using old duty rates. Check every time you reorder.
- Not counting samples. Samples and their shipping are part of what the product cost you to launch.
- Dividing by units ordered instead of units you can actually sell.
Questions people ask
What is landed cost?
Landed cost is the total cost of getting one unit of a product to the point where you can sell it: the supplier's price plus freight, duties and tariffs, customs and broker fees, prep and labeling, and shipping to your warehouse or to Amazon or Walmart.
How much should I add to Alibaba prices for shipping and duties?
It varies too much for a rule of thumb. Freight depends on weight, volume, and speed, and duties depend on the product's tariff classification and country of origin. On small, light items, landed cost is often 1.5x to 2x the unit price. Get a freight quote and look up the HTS code before ordering.
Do small shipments still avoid duties?
Not anymore. The US suspended the $800 de minimis exemption for imports from all countries in August 2025, so low-value shipments that used to enter duty-free now pay duties. Budget for duties on every order.
Should I use air or sea freight?
Air (or express) is faster and simpler for small first orders. Sea is much cheaper per unit for larger orders but takes weeks and has more fixed fees. Many sellers air-ship a first order to test, then switch to sea once a product proves itself.