You find a product from a supplier in the USA.
The supplier says:
“It’s $20 per unit.”
You do the calculation in your head.
“If I sell this for $35, I’m making $15 profit per item.”
Beautiful.
Business is looking good.
Then the shipping bill arrives.
And suddenly that $15 profit has disappeared faster than a customer’s attention when you say, “We’re out of stock.”
This is one of the most common mistakes new importers make.
They calculate profit using only the supplier’s price.
But the amount you pay your supplier isn’t necessarily the amount that product actually costs your business.
That’s where landed cost comes in.
What Is Landed Cost?
Landed cost is the total cost of getting a product from the supplier to your business and ready for sale.
It goes beyond the supplier’s invoice.
Depending on the shipment, your landed cost may include:
- Product purchase price
- International shipping
- Freight and handling charges
- Customs-related costs
- Duties and taxes where applicable
- Insurance, where applicable
- Warehouse or storage charges
- Local transportation and delivery
- Other import-related expenses
The exact costs vary depending on the product, shipping route, method, and applicable regulations.
The important point is simple:
The supplier’s price is only the beginning of the calculation.
Here’s a Simple Example
Imagine you import 100 units of a product from the USA.
Your supplier charges:
$20 per unit
So:
100 × $20 = $2,000
At first glance, you might think your inventory cost is $2,000.
But suppose your other shipping and import-related costs come to another $600.
Now your total landed cost is:
$2,000 + $600 = $2,600
That means your actual average cost isn’t $20 per unit.
It’s:
$26 per unit
If you sell each unit for $30, you aren’t making $10 per unit.
You’re making approximately $4 before considering other business expenses.
That’s a very different business decision.
And this is exactly why landed cost matters.
Why Supplier Price Can Be Misleading
Let’s say two suppliers offer you the same product.
Supplier A:
$18 per unit
Supplier B:
$21 per unit
You might immediately choose Supplier A.
But what if Supplier A is significantly more expensive to ship?
After transportation and other applicable costs, Supplier A’s products might actually arrive at a higher total cost.
Meanwhile, Supplier B could end up being cheaper overall.
This is why experienced importers don’t ask only:
“How much does the supplier charge?”
They ask:
“How much will this product actually cost me when it’s ready to sell?”
That’s the number that matters.
Shipping Can Affect Your Selling Price
Your landed cost directly affects how you price your products.
Suppose your competitors are selling a product for GH₵500.
You originally calculate that you can sell yours for GH₵450 because your supplier gave you a great price.
Then you calculate the complete landed cost and discover your margins are much smaller than expected.
Now you have a problem.
You either:
- Increase your selling price
- Accept a smaller profit
- Reduce other business costs
- Find a more efficient logistics solution
This is why shipping shouldn’t be treated as an afterthought.
It belongs in your pricing strategy from the beginning.
Landed Cost Also Helps You Compare Suppliers
Here’s another reason landed cost is useful.
It allows you to compare suppliers more accurately.
Instead of comparing:
Supplier price vs Supplier price
you compare:
Total landed cost vs Total landed cost
For example:
| Cost | Supplier A | Supplier B |
|---|---|---|
| Product | $1,800 | $2,000 |
| Shipping | $700 | $400 |
| Other costs | $200 | $150 |
| Total landed cost | $2,700 | $2,550 |
Supplier A looks cheaper at first.
But Supplier B actually gives you the lower total cost.
That’s the difference between buying cheaply and buying intelligently.
Don’t Forget Shipping Method
Your choice between air freight and ocean freight can also affect landed cost.
Air freight may make sense when:
- You need products quickly
- Your shipment is relatively small
- Your goods are high-value
- Stock availability is critical
Ocean freight may make more sense when:
- You’re shipping larger quantities
- Your cargo is heavy or bulky
- Your timeline is flexible
- You’re trying to reduce transportation costs
The cheapest shipping option isn’t automatically the best.
You have to consider what the shipping method does to your total business economics.
Why Small Businesses Need to Pay Attention
For a large company, a small cost difference across thousands of units can be significant.
For a small business, even a relatively small unexpected expense can affect cash flow and profit.
That’s why new importers should calculate their costs before ordering—not after the cargo arrives.
Before placing an order, try to understand:
Product cost + shipping + applicable import costs + delivery = estimated landed cost
Then ask:
“Can I still make a healthy profit at the price customers are willing to pay?”
If the answer is no, you’ve just saved yourself from an expensive mistake.
How Better Logistics Can Improve Your Landed Cost
You can’t always control the supplier’s price.
But you can make smarter decisions about logistics.
For example:
Consolidate Smaller Shipments
Combining suitable shipments can help make better use of available shipping space.
Choose the Right Freight Method
Don’t automatically choose air because it’s faster or ocean because it’s cheaper.
Choose based on your actual business needs.
Plan Shipments Properly
Poor planning can lead to unnecessary handling, storage, and other costs.
Work With a Transparent Logistics Provider
Understanding what you’re paying for makes it easier to calculate your true landed cost.
How MGL Logistics Helps Businesses Ship Smarter
At MGL Logistics, we understand that shipping isn’t just about moving products.
It’s about helping businesses make financially sensible decisions.
We support businesses with:
- Air freight
- Ocean freight
- Cargo consolidation
- USA warehouse services
- Shipment tracking
- Import and export logistics
- Documentation guidance
- Delivery coordination
Whether you’re importing a few boxes or building a larger inventory pipeline, our goal is to help you understand the logistics involved and choose a solution that fits your business.
Because the goal isn’t simply to get your products to Ghana.
It’s to get them there at a cost that still allows your business to make money.
A Simple Landed Cost Checklist
Before placing your next import order, consider:
1. Product cost
How much does the supplier charge?
2. International freight
How much will it cost to move the cargo?
3. Handling and related charges
Are there additional logistics costs?
4. Customs and import costs
What applicable duties, taxes, or clearance costs should you account for?
5. Local delivery
How much will it cost to get the goods to your business?
6. Final landed cost
What does each unit actually cost you once everything is accounted for?
Now you have a much clearer picture of your potential profit.
Final Thoughts
A product isn’t truly cheap just because the supplier gave you a low price.
The real question is:
How much does it cost by the time it reaches your business and is ready to sell?
That’s what landed cost helps you understand.
For Ghanaian business owners importing from the USA, calculating landed cost can help you:
- Price products more accurately
- Protect profit margins
- Compare suppliers properly
- Choose smarter shipping methods
- Avoid unpleasant financial surprises
At MGL Logistics, we believe good logistics should support good business decisions.
Because there’s nothing worse than making a sale and then realizing the profit went straight into shipping.
Know your landed cost. Know your numbers. Then ship smarter.