A guide to calculating cost when importing from Asia

When importing from Asia, it is important for companies to make an accurate calculation of the landed cost price. This price includes all costs associated with getting a product from the factory in Asia to the company in the Netherlands or elsewhere in Europe. In this blog we explain how to make this calculation and provide a concrete example to clarify the process.

What is the landed cost?

The landed cost is the total of all costs incurred to import a product. It includes, among other things, the purchase price of the product, transport costs, import duties, taxes and all additional costs such as insurance and quality control costs.

How do you calculate the landed cost?

1. Purchase price: This is the price you pay to your Asian supplier for the products themselves.
2. Transport costs: Costs for transporting goods from Asia to the Netherlands, such as sea freight, air freight or other transport.
3. Import duties and taxes: Depending on the product and country of origin, import duties and taxes may apply.
4. Insurance costs: The costs to insure your cargo during transport.
5. Other costs: These may include costs for storage, handling, quality controls, agent fees, and so on.

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An example

Suppose a company imports electronic equipment from China. Here is how the landed cost can be calculated:

So, the total landed cost including VAT is €22.087,- + €4.239,- = €26.326,-

Import by yourself or outsource?

At Westwood we offer customized support services for your import needs from Asia. Whether you import yourself and need advice or assistance in specific areas, or you prefer to leave the entire import to us, we tailor our services to your needs. From calculating landed cost to fully handling the import process, including sourcing, design, quality checks and logistics, at Westwood we ensure you import with confidence and ease. Choose the approach that best suits your business strategy and let us do the rest. 

Conclusion

Understanding and accurately calculating landed cost is critical to successful import operations. By including all cost components in your calculation, you can budget better and accurately determine your profit margins. With this knowledge, as a Dutch company you are better prepared for successful trading activities with Asian partners.