Landed cost is the total cost of bringing a purchased item to its intended location and usable state. Depending on scope, it can include price, freight, insurance, duties, taxes, brokerage, handling, storage, quality, or other attributable costs. The calculation must state its inclusions, currency, timing, assumptions, and data sources to support fair supplier comparison.
In plain English
It looks beyond unit price to the costs required to receive and use the item.
Illustrative example
At Northstar Industrial Systems, procurement compares imported and domestic components using unit price, freight, duty, lead-time inventory, and inspection cost under a documented scope.
- Related terms
- Total cost of ownership; Bid comparison; Purchase price variance; Cost model
- Lifecycle stages
- Source; Award
- Stakeholders
- Procurement; Finance; Operations