GLOSSARY · UPDATED OCT 20, 2026
What is landed cost for Amazon sellers?
Landed cost for Amazon sellers is the full cost of getting one unit into sellable stock at Amazon, Walmart or your 3PL: the product, freight, duty, customs and broker fees, prep and labels, and the inbound shipment to the warehouse. It is the cost every margin calculation should start from. In 2026 the rules behind the duty line changed several times, so a landed cost from last year is probably wrong.
The landed cost formula
- Landed cost per unit
= product cost + freight per unit + duty + customs and broker fees per unit + prep and labeling + inbound shipping to the warehouse
- Duty
= customs value × duty rate (base duty plus any additional tariff that applies to the country of origin)
Allocate shipment-level costs, such as ocean freight and broker fees, by volume or weight rather than by unit count when products differ in size. Otherwise small items carry the freight of large ones.
Worked example, line by line
Illustrative · sample figures. 2,000 units from a supplier in a country at the 12.5% Section 301 rate, base duty 0% for this sample product. Customs value is the $6.00 product cost.
| Line | Per unit |
|---|---|
| Product cost | $6.00 |
| Ocean freight, drayage and insurance, allocated by volume | $0.80 |
| Section 301 duty at 12.5% of $6.00 | $0.75 |
| Customs broker and entry fees, spread over 2,000 units | $0.15 |
| Prep and FNSKU labels at a prep center | $0.40 |
| Inbound shipping to FBA | $0.35 |
| Landed cost | $8.45 |
The supplier invoice says $6.00. The real cost is 41% higher. Price from $8.45, and the contribution margin on the same $30 product is $2.45 lower per unit than a spreadsheet built on the invoice suggests.
What changed for duty in 2026
Each change below altered the duty line for most importers. Confirm how it applies to your goods with your customs broker.
| Date | Change | Source |
|---|---|---|
| Aug 29, 2025 | The $800 de minimis exemption suspended for all countries; it ends by statute on Jul 1, 2027 | Troutman Pepper Locke, Aug 18, 2026 |
| Feb 20, 2026 | Supreme Court rules IEEPA does not authorize tariffs (Learning Resources, Inc. v. Trump) | Thomson Reuters, Feb 20, 2026 |
| Feb 24, 2026 | Section 122 tariff of 10% on most imports, limited to 150 days | Morgan Lewis, Jul 27, 2026 |
| Apr 20, 2026 | CBP opens phase 1 of the CAPE refund process for IEEPA duties, filed in ACE | Thompson Hine, Apr 2026 |
| Jul 24, 2026 | Section 122 ends; Section 301 tariffs of 10% or 12.5% by country take effect, with caps for some partners and exemptions such as Section 232 goods | Morgan Lewis, Jul 27, 2026 |
If you paid IEEPA duties in 2025 or early 2026, ask your broker whether a refund applies. A refund lowers the landed cost of stock you still hold.
How landed cost works for Amazon sellers, and on Walmart and Shopify
Amazon.
Amazon stopped offering FBA prep and item labeling in the US from Jan 1, 2026, so prep is now always your cost, at a prep center or in house (Amazon developer changelog, Jul 28, 2025). Two more points matter. Inbound placement and transport to FBA belong in landed cost, not in "Amazon fees". And since Mar 31, 2025, Amazon reimburses lost or damaged units at manufacturing cost, which excludes shipping, handling and duties (eComEngine, vendor). A lost unit therefore costs you the gap between landed cost and manufacturing cost, $2.45 a unit in the example.
Walmart.
Units sent to WFS need a scannable GTIN or UPC on each item. If Walmart has to label or bag units that arrive unprepared, it charges unplanned prep fees, for example $0.65 a unit for labeling (Walmart WFS prep services, updated Oct 8, 2026). Build planned prep into landed cost so unplanned fees never appear.
Shopify.
Landed cost runs to your own warehouse or 3PL, including the 3PL's receiving charge per carton or unit. Read the receiving lines on the 3PL invoice; they are part of landed cost, not overhead.
Common mistakes
-
Using the supplier price as cost.
In the example above, freight, duty, fees and prep add 41% to the invoice price.
-
Allocating freight by units.
Use cubic feet or weight when products differ in size.
-
Not updating duty.
A rate change applies to entries after its date, so stock already landed keeps the old cost and new stock carries the new one. Track landed cost by shipment.
-
Forgetting refunds and credits.
IEEPA refunds and supplier credits lower cost on the units they relate to.
-
Leaving inbound to Amazon out.
Placement and transport fees are part of getting the unit sellable.
What is included in landed cost?
Everything you pay to get one unit sellable in the warehouse: product cost, freight and insurance, duty and tariffs, customs and broker fees, prep and labels and inbound shipping to FBA, WFS or your 3PL. Storage, fulfillment and selling fees come after and sit in contribution margin, not landed cost.
Is duty charged on the retail price?
No. Duty is generally assessed on the customs value of the goods, usually the price paid to the supplier, not on your selling price. Your broker confirms the value and classification for each entry.
Does the end of de minimis affect me?
If you shipped low-value parcels direct from overseas suppliers to customers, yes. Duty-free treatment for shipments of $800 or less has been suspended for all countries since Aug 29, 2025; the exemption ends by statute on Jul 1, 2027. Every parcel now carries duty and customs processing.
How often should I recalculate landed cost?
For every new shipment, and whenever a tariff, freight rate or supplier price changes. In 2026 duty changed in February and again on Jul 24. We log each change, with its effective date and source, in the seller rule tracker.
Why does landed cost matter for reimbursements?
Because Amazon reimburses lost or damaged units at manufacturing cost, not landed cost or sale price. Keep manufacturing cost current in Seller Central, and file claims within 60 days of the loss being reported; see FBA reimbursements.
Can you keep landed cost current for us?
Yes. Landed Cost Desk builds landed cost per SKU and per shipment in your own accounts and updates margins when duty changes. Prices are on pricing.
Sources7 sourcesLast checked Oct 20, 2026
- 01morganlewis.comSection 301 at 10% or 12.5% from Jul 24, 2026; caps and exemptions; Section 122 from Feb 24, 2026; Jul 27, 2026; law firm; checked Oct 20, 2026Primary
- 02thomsonreuters.comIEEPA does not authorize tariffs; Feb 20, 2026; press; checked Oct 20, 2026Primary
- 03thompsonhinesmartrade.comCAPE phase 1 from Apr 20, 2026; law firm; checked Oct 20, 2026Primary
- 04troutman.comde minimis suspended Aug 29, 2025; ends by statute Jul 1, 2027; Aug 18, 2026; law firm; checked Oct 20, 2026Primary
- 05developer-docs.amazonAmazon prep and labeling end in the US from Jan 1, 2026; Jul 28, 2025; checked Oct 20, 2026Primary
- 06ecomengine.comreimbursement at manufacturing cost from Mar 31, 2025, excluding shipping, handling and duties; updated Mar 7, 2025; vendor; checked Oct 20, 2026Vendor
- 07marketplacelearn.walmart.comlabeling $0.45 a unit, $0.65 unplanned; updated Oct 8, 2026; checked Oct 20, 2026Primary
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