How to Calculate Landed Cost from Taiwan to the USA: The Complete Formula

Landed cost is the total cost to get one unit of product from the factory in Taiwan to a deliverable state in the US — whether that is in your FBA warehouse, your 3PL, or directly to a distributor's dock.

Most Taiwan sellers make pricing decisions based on factory cost (ex-works price) without accurately accounting for all downstream costs. This results in listing prices that look profitable on a spreadsheet but generate negative margin in practice. Landed cost accounting is the foundation of every sound pricing and channel decision.

The landed cost formula: Factory Cost + Export Costs + International Freight + Import Duties & Taxes + Customs Broker Fees + Inland Drayage + FBA Prep & Receiving = Landed Cost Per Unit.

EXW (Ex Works): the buyer (you) is responsible for everything from the factory door onward — export clearance, freight, insurance, import duties. Lowest factory quote price, but highest hidden cost and complexity for the buyer.

FOB (Free on Board): the seller (your Taiwan supplier) handles export clearance and delivery to the origin port. Risk transfers to you when cargo is loaded onto the vessel. FOB is the most common Incoterm for Taiwan-US shipments. Your freight forwarder picks up from the origin port.

DDP (Delivered Duty Paid): the seller handles everything — export, freight, import duties, and delivery to your named US destination. Highest factory quote price, but zero logistical complexity for you. DDP from a Taiwan supplier is rare for sea freight, more common for small express shipments (DHL, FedEx).

For Amazon FBA from Taiwan: FOB Kaohsiung (or FOB Keelung) is the standard. The seller gets cargo to the port; you (through your freight forwarder) handle ocean freight, ISF, US customs, and drayage to FBA.

Layer 1 — Factory price (FOB): your negotiated per-unit cost from the manufacturer, including their export documentation fee (typically $50–150 per shipment, amortized across units).

Layer 2 — Freight: ocean LCL ~$3–8/CBM/day + terminal fees, or FCL $2,500–4,500/container amortized per unit. Air freight $4–8/kg. Add origin port handling fees ($150–300 per container).

Layer 3 — Import duty: determined by your product's HTS code. Rates range from 0% (most electronics under Section 301 waivers) to 25%+ (some consumer goods subject to Section 301 China tariffs). Taiwan-origin goods are generally not subject to Section 301 tariffs — confirm your HTS classification.

Layer 4 — Customs broker fee: $150–300 per entry plus ISF filing fee ($50–100).

Layer 5 — Inland drayage: container from port to FBA warehouse or 3PL. LA to Ontario CA FBA: $300–600/container. Amortize across units.

Layer 6 — FBA prep costs: FNSKU labeling ($0.10–0.25/unit if done at origin), poly bagging ($0.15–0.40/unit), carton labeling. Can be done by your 3PL prep center at $0.30–0.80/unit total.

Layer 7 — FBA inbound shipping: from your 3PL to FBA warehouse (if using Amazon's partnered carrier, often $0.10–0.30/unit for small items).

Layer 8 — FBA fulfillment fee: Amazon's pick-pack-ship fee based on size tier and weight. Standard-size item 1 lb: approximately $3.86. Check current FBA fee schedule as rates adjust annually.

Layer 9 — Amazon storage fee: monthly storage + potential long-term storage. Budget $0.05–0.15/unit/month for standard-size items in normal season.

Layer 10 — Amazon referral fee: 8–15% of the selling price depending on category (most categories: 15%).

Factory cost (FOB): $8.00. International freight (LCL, amortized): $0.80. Import duty (5% of FOB): $0.40. Customs + ISF: $0.25. Drayage: $0.15. FBA prep: $0.45. FBA inbound: $0.20. Total Landed Cost: $10.25.

FBA costs on Amazon: Fulfillment fee: $3.86. Storage (monthly average): $0.08. Referral fee (15% of $29.99): $4.50. Total Amazon cost: $8.44.

Advertising cost (target 15% ACoS): $4.50 (15% × $29.99).

Total COGS + fees + ads: $10.25 + $8.44 + $4.50 = $23.19.

Net profit per unit: $29.99 − $23.19 = $6.80 (22.7% net margin).

Margin at this level is viable. If ads push ACoS to 25%, net drops to $3.80 (12.7%). If factory cost increases by $1 with no price increase, net drops to $5.80. This analysis shows exactly which levers matter — and why negotiating FOB price down by $0.50 matters more than cutting freight cost by $0.20.

Build a landed cost spreadsheet with inputs: factory FOB price, CBM per carton, units per carton, ocean freight rate, duty rate, and destination FBA site. Most inputs change slowly (freight rates quarterly, duty rates rarely); factory price is the key negotiating lever.

Update your model every quarter or after every ocean freight quote. Freight rates can swing 50–200% seasonally — what worked in your Year 1 model may not hold in Year 2.

Use your landed cost model as a negotiating tool with your factory. When asking for a price reduction, show the full cost stack: "My total landed cost is $10.25, and I need to hit $8.50 to maintain margin at my target retail price of $27.99. Here is the breakdown. Can we work on packaging density to reduce CBM and lower freight, or is there a higher-volume tier that gets us to $7.50 FOB?"