Landed cost: why the invoice price is never what the goods cost you
Ask a trader what a carton cost and most will read the price off the supplier's invoice. But the carton isn't in your shop at the invoice price. It got there on a truck, through a port or a park, and past a few people who were paid to move it. All of that is part of what it cost you.
What goes into landed cost
Landed cost is everything you paid to get the goods to your shelf, not just what you paid the supplier. For most deliveries that means the invoice, the transport, any clearing or duty charges on your papers, and the loading and offloading.
If you import, duty and port charges can be a big share of the total. If you buy locally, the transport alone is often more than people think.
Spread it across the delivery
Add up everything you paid for one delivery, then divide it across the goods that came in it. If one delivery brought 40 cartons and cost ₦855,000 in total, each carton cost you ₦21,375, even though the invoice said ₦18,500.
When a delivery holds different goods, spread the extra costs by value: a product that is half the invoice takes half the transport.
Why it matters
If you price from the invoice, you think you make more than you do. On the delivery below, selling at ₦21,000 looks like ₦2,500 profit a carton. It is really a loss of ₦375.
Transport and clearing prices change often. Working out landed cost for every delivery, not once a year, is what keeps your prices honest.
Keep the papers
Keep the receipt for every charge with the delivery it belongs to: the truck, the clearing agent, the loaders. Then the cost of each carton is something you can show, not something you remember.
Maaz Buk adds the transport, duty and clearing on a delivery to the goods it brought, so the cost of each item is what it took to get it to you.
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