Branislav Belosevic 31/08/2026 Branislav Belosevic 31/08/2026

Landed Cost 101: The Formula That Decides Whether You Make Money

The landed-cost formula for NZ importers — every line item from FOB price to GST and levies, with a full worked example in real numbers.

Two importers buy the identical product at the identical US$10 FOB price. One makes 40% net margin; the other quietly loses money on every unit and doesn't discover it for six months. The difference is a single spreadsheet: the landed-cost calculation. It's the least glamorous document in importing and the most decisive — calculating your costs appropriately genuinely makes or breaks your import.

Landed cost = every dollar it takes to get one unit from the factory floor to your NZ warehouse, ready to sell. Not the supplier's price. Not the price plus freight. Everything.

The quick rule of thumb

For a low-duty destination like New Zealand, a useful first-pass estimate is supplier's FOB price + 20–30% ≈ landed cost. It's good enough for shortlisting ideas on your shopping list — and nowhere near good enough for a purchase order. Before real money moves, you build the full sheet and triple-confirm each line with the actual provider: forwarder, broker, insurer, platform.

Every line item, NZ edition

Product cost (FOB): the supplier's quoted price, which under FOB terms includes delivery to the Chinese port. Include any export-packaging extras.
Sea/air freight: mid-2026 indicative rates China→NZ: a 20ft container US$2,250–2,750; 40ft US$4,455–5,445; LCL around US$38/cbm; air freight about US$4.00/kg for larger lots; courier around US$6.71/kg door to door. Rates are volatile — quote, don't assume.
Insurance: the standard is about 1% of product value. Cheap, and not the line to skip.
Customs duty: 0% on virtually all Chinese-origin goods with a Certificate of Origin under the NZ–China FTA — make sure the supplier provides it. Otherwise most goods are duty-free anyway, with roughly 5–10% on categories like textiles, clothing and footwear. Confirm your HS code on tariff-finder.govt.nz.
GST: 15%, calculated on (goods value + shipping + insurance + any duty). If you're GST-registered you claim it back — treat it as cash flow, not cost, but you still have to fund it at the border.
Goods Management Levies: the new consignment-based border levies from 1 April 2026. Small on any one shipment, but per-consignment — one more reason to consolidate. Check customs.govt.nz for current rates on high-value entries.
Broker and forwarder fees: customs entry lodgement, handling, documentation. Ask for the all-in quote.
Inspection: ~US$300 for a third-party pre-shipment inspection. Non-negotiable on real orders.
Testing and licence fees: lab testing where relevant (a few hundred US dollars), plus the fees suppliers never mention — Bluetooth licensing and Sisvel (MP3/MP4) royalties are the importer's cost, and skipping them risks customs holds or claims from licence holders.
Domestic costs: transport from the port, storage, fulfilment, and your selling channel's fees when you calculate final profitability.

The worked example

Let's land 1,000 Bluetooth speakers in Auckland. FOB price US$10 each = US$10,000.

Freight: ~3 cbm shipped LCL at ~US$38/cbm ≈ US$115 with minimums
Insurance at 1% of product value: US$100
Duty with NZCFTA Certificate of Origin: US$0
Inspection: US$300
Broker, entry and Goods Management Levy: allow roughly US$150 (confirm with your broker)
Subtotal: ~US$10,665 — about US$10.67 per unit
GST: 15% on (goods + shipping + insurance + duty) ≈ US$1,532 — funded at the border, claimed back if GST-registered

So a GST-registered importer's true landed cost is around US$10.67/unit — roughly FOB + 7%, well inside the rule of thumb, because this product is small, light and duty-free. Convert to NZ dollars at the day's rate, add local delivery and storage, then selling costs: on a marketplace, budget several percent for fulfilment and payment fees. If that unit retails at, say, NZ$49–59 in NZ, the margin story is obvious — and it was visible before ordering, which is the entire point.

**Figure:** Landed-cost build-up for 1,000 Bluetooth speakers from FOB price to NZ warehouse, showing each cost layer per unit.

Now rerun the same sheet for a bulky item — a US$20 product at 0.1 cbm each — and watch freight alone add US$3.80+ per unit before GST. Same formula, opposite verdict. That's the formula doing its job: killing bad products on paper instead of in your garage.

One sheet per product, forever

Make the landed-cost sheet a permanent habit: one per product, updated with actual invoiced figures once the shipment lands, so every reorder starts from real numbers rather than estimates. Costs drift — freight moves ~19% in a month during 2026, suppliers nudge prices, levies get reviewed — and your sheet is where drift becomes visible before it becomes losses.

Key takeaways

Landed cost = FOB + freight + insurance + duty + GST + levies + fees + inspection — every line, triple-confirmed with the actual provider.
FOB + 20–30% is a shortlist estimate only; for NZ with FTA duty at 0%, small light products often land far below that.
GST (15% on goods + shipping + insurance + duty) is claimable if registered — cash flow, not cost, but budget to fund it.
Watch the silent killers: freight on bulky items, licence royalties, and per-consignment levies on fragmented shipments.