Working out real margins after freight and duties

New resellers usually price from unit cost. That is the number on the invoice, and it is the least useful one. What matters is landed cost — what the unit actually cost you once it is sitting in your warehouse.

What landed cost includes

Cost	Often forgotten?	Why it matters
Unit price	No	The number on the quote
Inbound freight	Sometimes	Can add 5–15% to unit cost on small orders
Import duty	Often	Depends on product type and destination
Clearance fees	Often	Fixed cost, so it hurts small orders most
Payment fees	Often	Card and PayPal processing takes a percentage
Storage and handling	Usually	Even a spare room has a cost
Returns and defects	Almost always	Budget 2–5% and you will rarely be far off

A simple way to sanity-check a price

Take your landed cost per unit, multiply by three, and see whether the result is a price the market will actually pay. If it is not, the problem is the product choice, not the pricing. No amount of clever pricing fixes a product whose landed cost is too high for its category.

Where margin actually leaks

Small orders. Fixed clearance and freight costs do not scale down. The same shipment spread over 200 units is far cheaper per unit than over 50.
Slow movers. Stock that sits for six months has a real carrying cost, even if you never write it down.
Returns. A 5% return rate on a 30% margin product wipes out a sixth of your profit before you count return freight.
Currency movement. If you buy in one currency and sell in another, your margin moves with the exchange rate whether you plan for it or not.

Note: duty rates and fee structures vary by product and destination. Confirm the actual figures for your specific goods before finalising any price.

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