Landed cost per piece is the total cost of getting a shipment of jewellery into your warehouse, divided by the number of pieces you can actually sell. Add the price of the goods to every cost of packing, checking, shipping, insuring, clearing and paying for them, then divide by the sellable quantity, not the ordered quantity.
It is the only number you should use to set a retail or wholesale price. The maker's price per piece on its own understates your real cost.
The formula
- Goods: price per piece × pieces, plus any mould or design charges for this order.
- Packaging: boxes, cards, tags and anti-tarnish bags if billed separately.
- Checks: product testing (spread across the orders it covers) and pre-shipment inspection.
- Transport: local transport, export clearance, freight and insurance.
- Import: duty on the customs value, plus clearance and broker fees.
- Money: bank charges and currency conversion.
- Landed cost per piece = total of all the above ÷ sellable pieces.
A worked example
The figures below are an illustration to show the method, not quotes or typical prices. Suppose you order 2,000 pieces at 2.00 per piece in your currency, so the goods cost 4,000. Packaging adds 300, testing and inspection 400, air freight and insurance 600, and local transport and export clearance 100. Import duty at an illustrative 5 per cent of the customs value adds about 250, clearance fees 150 and bank charges 50.
The total is 5,850. If 2 per cent of pieces turn out defective and unrecoverable, you have 1,960 sellable pieces, so the landed cost is about 2.98 per piece, roughly half as much again as the price you were quoted.
Import VAT or GST is usually left out if you can reclaim it, as most registered businesses can. If you cannot reclaim it, add it too.
Common mistakes
- Dividing by pieces ordered instead of pieces received and sellable.
- Charging the whole cost of a test report to one order when it covers several.
- Using a rule-of-thumb freight figure rather than the actual quote for this shipment.
- Forgetting that duty is often charged on the value including freight and insurance.
- Ignoring currency movement between quote and payment.
Allocate by value or by piece
When a shipment mixes cheap earrings and heavier necklace sets, spreading costs equally per piece distorts both. Allocate freight by weight or volume, and duty and insurance by value. A simple spreadsheet with one row per design does this well. For the full list of costs to include, see the article on the hidden costs of importing imitation jewellery.
What this means for a buyer
Build the calculation before you order, then update it with actual costs after each shipment. Creston & Co works for buyers only, for a fixed fee agreed in writing. We give you the Rajkot-side costs in full, from goods and packing to testing and inspection, so your landed cost has no gaps. Start with a free sourcing review.