What landed cost calculation means
Landed cost is the total cost of getting a product from the factory to your warehouse, ready to sell. A proper landed cost calculation for products imported from India adds the supplier price, international freight, insurance, import duty, taxes, port and clearance charges and inland delivery. Many new importers compare only factory prices and are surprised later. Working out the full figure before you order is the only reliable way to set selling prices and protect your margin.
Landed cost is best worked out per carton and per unit, not just per container. Your customers buy by the pack or the carton, so that is the figure you need when preparing price lists. Build a simple spreadsheet with one row per product, enter the carton quantity and container loadability, and let the formulas spread every shared cost fairly across the items in the shipment.
Step one: the supplier price and Incoterm
Start with the price and the Incoterm it is quoted on. Under Incoterms 2020, EXW means you collect from the factory, FOB means the supplier delivers the goods on board at the Indian port, CFR (also written C&F) includes sea freight to your port, and CIF adds insurance. Door delivery covers transport to your premises. White Orchid quotes on EXW, FOB, CFR, CIF and door delivery terms, shipping from Mundra, Pipavav or Nhava Sheva.
The Incoterm decides which costs are already inside the price and which you must add. An FOB price looks lower than a CIF price, but you still pay freight and insurance separately. When comparing offers from different countries or suppliers, convert every quotation to the same basis, ideally the cost at your own warehouse door, before deciding which is actually cheaper.
Step two: freight and insurance in the landed cost calculation
Paper products are bulky, so freight often forms a large share of landed cost. Ask your forwarder for a rate per container from your chosen Indian port to your destination port, then divide it by the number of cartons the container holds. Better packing and full loads lower the cost per carton. Indicative sea transit times range from a couple of weeks to over a month, and they vary by carrier, route and season.
Cargo insurance is usually a small line but an important one. It protects against loss or damage in transit. Under CIF the supplier arranges minimum cover, while under FOB or CFR you arrange it yourself. Many customs authorities value goods on a CIF basis for duty purposes, so even if you buy FOB, you will need freight and insurance figures to work out the customs value correctly.
Step three: import duty and HS codes
Duty depends on the HS code of each product and the rules of your country. Tissue products are usually classified under heading 4818, bagasse tableware under 4823 (often 4823.70), copy paper under 4802, and thermal paper rolls under 4811 or 4823 depending on form. Always confirm the exact code and rate on your official tariff tool, such as EU TARIC, the US HTS, the UK Trade Tariff, the Canada CBSA tariff or the GCC common customs tariff, or ask a customs broker.
Check whether any trade agreement applies. India has agreements with the UAE (CEPA) and Australia (ECTA), and a certificate of origin may be needed to claim any preference. Some countries also apply other charges such as anti-dumping measures or product registration fees. A customs broker in your country can confirm all of these before you place the order, which is far cheaper than finding out at the port.
Step four: taxes and local charges
Most countries charge a consumption tax such as VAT or GST on imports, usually calculated on the customs value plus duty. In many cases a registered business can reclaim it, but it still affects cash flow. Local charges include terminal handling, documentation fees, customs clearance, container delivery and unloading. Ask your forwarder for a full estimate of destination charges, because these can vary widely between ports.
| Cost element | Amount | Running total |
|---|---|---|
| FOB price at Indian port | 50 | 50 |
| Sea freight and insurance | 15 | 65 |
| Import duty (hypothetical, confirm your rate) | 5 | 70 |
| Port, clearance and local delivery | 8 | 78 |
| Landed cost before recoverable tax | 78 | 78 |
This table is an illustrative example with round, hypothetical numbers only. It is not a quotation and does not reflect any real duty rate or freight rate. Real figures depend on your market, product classification, freight at the time of shipment and local charges. Use the structure, then replace each line with confirmed data from your supplier, forwarder and customs broker.
The cheapest factory price is not always the cheapest product on your shelf. Only a full landed cost calculation shows what each carton really costs you.
Ways to reduce landed cost
Once you can see every line of the calculation, you can work on each one. Freight and packing usually offer the biggest savings for bulky paper products, while correct classification and the right Incoterm prevent costly surprises. Negotiate destination charges with your forwarder in advance rather than accepting them after arrival, and keep a record of actual costs from each shipment to refine the next estimate.
- Ship full container loads to spread freight across more cartons of product.
- Choose packing formats that fit more saleable units inside each container.
- Confirm HS codes early so duty is not misclassified or overpaid.
- Check trade agreement eligibility and arrange certificates of origin where relevant.
- Compare several forwarders and ports for both freight and destination charges.
Mixed containers also help. Combining kitchen paper towels, tissue napkins and bagasse plates in one load lets smaller distributors enjoy full container freight economics without overstocking one item. Ask the supplier for carton dimensions and weights for each item so your forwarder can plan the load and you can allocate freight accurately to every product line in the landed cost sheet.
Get a landed cost ready quotation from White Orchid
White Orchid supplies tissue, BPA free thermal rolls, bagasse tableware and copy paper from Santej, near Ahmedabad, on EXW, FOB, CFR, CIF and door delivery terms. Tell us your destination port, products and volumes, and we will share packing details and container loadability so you can complete your landed cost calculation accurately. Please contact us or email info@whiteorchidtissue.com.
Frequently Asked Questions
Is duty calculated on the FOB or CIF value?
It depends on your country. Many customs authorities, including the EU, use a CIF based customs value, while some others use FOB. Confirm the valuation basis with your customs authority or broker.
Which HS code applies to tissue napkins and toilet rolls?
They are usually classified under HS heading 4818, but the full national code depends on the product and country. Confirm the exact code and rate on your official tariff tool or with a broker.
How do I include freight in my landed cost per unit?
Divide the total container freight and insurance by the number of cartons loaded, then by units per carton. Container loadability details from the supplier make this calculation much more accurate.
Can White Orchid quote CIF to my port?
Yes. White Orchid quotes on EXW, FOB, CFR, CIF and door delivery terms by sea or air. Share your destination port and products to receive a quotation on your preferred basis.