Many buyers compare quotes by price per kilo alone, then find that the cost of a bottle in their warehouse is well above what they calculated. The factory price is only one part of the landed cost, which is what you actually spend until a unit is ready to sell in your market. This guide covers the cost lines and how to calculate them.
Landed cost versus factory price
Landed cost is everything you pay from the factory gate to your warehouse door, divided by the number of units you can actually sell. A quote usually covers the product and agreed packaging; transport is included only depending on the Incoterm used. So before comparing two offers, confirm what each one covers. Your margin is calculated on landed cost, not factory price. See also our piece on unit economics for beauty brands.
Cost lines to include
| Line | What it covers | What moves it |
|---|---|---|
| Product price | Oil or finished product and agreed packaging | Grade, quantity, bottle type |
| Outer packing | Cartons, dividers, palletising | Glass weight, carrier requirements |
| Freight | Factory to port or airport to destination | Weight, volume, mode, season |
| Insurance | Cover during transit | Cargo value and policy terms |
| Customs | Broker fees, duties and taxes in your country | Classification, local rules |
| Inspection and registration | Tests or formalities required | Country and product |
| Storage and local delivery | Receiving, storage, transport | Duration and distance |
| Payment costs | Bank fees, exchange differences | Quote currency, payment date |
Do not assume duties and taxes are the same everywhere. Check with your customs broker, after confirming the HS code for your product.
How to calculate it
- Align the basis: ask which Incoterm applies and what it includes.
- Convert every line into one currency at the rate you expect on the payment date.
- Get written quotes from the forwarder, broker and insurer.
- Count sellable units, not shipped units: deduct breakage, leakage and free samples.
- Divide the total by sellable units.
- Add a safety margin based on your own record of delays and currency swings.
Formula: unit landed cost = (product + outer packing + freight + insurance + duties and taxes + inspection + storage + payment costs) ÷ sellable units. People forget the denominator: breakage raises the cost of every intact bottle, which is why packing glass shipments properly is a cost decision, not just a logistics one.
Common mistakes
- Comparing two quotes on different bases.
- Forgetting payment costs and currency risk.
- Missing that freight can be charged by volume rather than weight.
- Applying the cost of a small order to every order: some charges are fixed per shipment.
- Ignoring the cost of slow-moving stock, especially with a shelf life.
Cutting cost without cutting quality
Work on what you can control: standardise bottle sizes, plan ahead to avoid urgent air freight, consolidate orders. Never save on glass or packing quality; breakage costs more than you saved.
FAQ
Does the quote include landed cost?
Usually not. It states what the Incoterm covers; customs, local taxes and storage are on your side. Ask for a line-by-line breakdown.
How do I find customs duty in my country?
It depends on the country, tariff code and trade agreements. Ask a licensed broker or the customs authority.
Does cost per bottle fall with quantity?
Often, since some costs are fixed per shipment, but not in a straight line, and larger stock ties up capital.
Calculate before you price
An accurate landed cost makes your negotiations stronger and your margin safer. For your next order, request a quote from Assil Ouargane with your quantity, packaging and destination, and we will explain what the offer covers.
