The Landed Cost Formula
Australian brands usually work backwards from retail price, so understanding landed cost per unit lets you set realistic margins. Use the formula:
`
Landed Cost = (Product Cost + Inland China Fees + International Freight + Insurance + Customs Duty + GST + Destination Delivery) ÷ Units
`
Worked Example (Homewares, 450 units)
| Insurance | $110 | 0.5% of cargo value |
|---|---|---|
| GST (10%) | $920 | Calculated on CIF + duty |
Spreadsheet Columns Australians Should Track
- Incoterm (EXW/FOB) – determines who covers inland origin fees.
- Currency + FX rate – lock in a rate or add a buffer (popular searches include "AUD USD hedge for imports").
- Volume/weight – informs freight and warehousing.
- Duty rate & HS code – plug into our Customs Duty Calculator.
- GST reclaim status – note if you can claim ITCs via BAS.
- Contingency – 3-5% for inspections, storage, or exchange-rate moves.
- •Using the wrong conversion rate: Update FX on the quote acceptance date, not invoice date.
- •Forgetting packaging upgrades: Eco-friendly packaging can add 3-4%—include it upfront rather than eroding margin later.
- •Not allocating overheads: Add AUD per unit for 3PL receiving, prep, and labelling so retail pricing is realistic.
Decision Framework
| Question | If YES | If NO |
|---|---|---|
| Do you need cash faster? | Choose air freight for first batch then switch to sea | Stick with sea for lowest landed cost |
| Do you qualify for ChAFTA? | Reduce duty to 0% and reinvest savings in marketing | Budget 5% duty and renegotiate FOB pricing |
| Are you GST registered? | Claim ITCs and model cash flow impact | Add GST to final margin because it becomes a hard cost |
Tools & Templates
- •Duplicate our Google Sheet template (link provided in the Spotyard client portal).
- •Use the Shipping Calculator for each mode.
- •Feed the results into your pricing model or Shopify cost-of-goods field.
Final Checklist Before You Confirm Production
☑️ Quote compared across at least two forwarders
☑️ Landed cost reviewed in both AUD and supplier currency
☑️ Scenario plan completed for +/- 8% freight swings
☑️ Cash flow calendar updated for duty/GST payments
Need help validating your numbers before presenting to investors or wholesale partners? Our pricing specialists run landed-cost audits for Australian brands every week.
Request a Cost Review | Shipping Calculator
How Spotyard Helps
Spotyard's pricing desk benchmarks every quote against current China → Australia indexes:
- •Multi-mode scenarios (sea, air, courier) with landed-cost modelling
- •Volume consolidation, rate hedging, and surcharge tracking
- •Integrated calculators for shipping, breakeven, and container fill