Landed Cost Calculation as an SOP for Shopify Imports

A landed cost calculation is a procedure, not a one-off spreadsheet. Write it down as numbered steps, with the source of every number. That way the person building next quarter's purchase order does not price off last year's duty rate.

The math itself is addition. As eBrands lays out, the pieces are goods, freight, insurance, duty, government fees, brokerage and inland delivery, and you divide the total by the units received. The hard part is that two inputs keep moving. One is the value duty is charged on. The other is the rate.

A rate checked in March is not a rate anyone should reuse in November.

What goes into a landed cost calculation per unit?

Landed cost is what it actually costs to get one unit into your warehouse, not the number on the supplier's invoice.

So the working formula is:

Landed cost per unit = (goods + freight + insurance + duty + extra tariffs + government fees + brokerage + inland delivery) / units received

Two practical notes on allocation. Shipment-level costs such as freight, brokerage and drayage get divided across the units in that shipment. If one container holds three SKUs, split those lines across the SKUs in that container and write down which method you picked.

Price from the per-unit figure, not the factory quote. The worked example further down shows how wide that gap can get.

Which number is the customs value for a US entry?

As Racklify explains, for a US import, duty is charged on transaction value: the price actually paid or payable for the goods when sold for export to the United States. The order is classify, then value, then apply the rate. The calculation is documented on the entry and stays open to audit afterward.

Some costs get added to that value even when they are not on the invoice: buyer-paid packing, selling commissions, royalties tied to the sale, and assists such as tooling or molds you gave the factory free of charge.

Here is the error worth checking first. If your supplier invoices CIF but you import into the US, the invoice total is not your dutiable value. CBP's own help page says the CIF price is not the value to declare. eBrands points out that filing a US entry off the CIF figure inflates the duty and every fee calculated from that value, and the same invoice format repeats the error on every shipment.

Convert supplier currency to dollars at the rate customs accepts for the entry date, and record the rate you used. Mixed shipments may need several tariff lines, each valued separately. Which costs sit with the seller in the first place comes from the Incoterm you agreed. If duties are being charged onward to customers, this site's breakdown of DDP versus DDU shipping covers which party clears the goods.

How do you find the duty rate, and what stacks on top of it?

Start with the Harmonized Tariff Schedule code for the product, and read the base rate from that line. That rate is only the starting point. Trade remedy programs stack on top of it, and each one moves on its own schedule.

CBP publishes dated guidance as each program changes. Its 2026 notices include Section 232 duties on aluminum, steel and copper (04/03/2026), a further adjustment to those metal tariffs (06/05/2026), Section 232 duties on semiconductors (01/14/2026), and updated guidance on a Section 301 China conforming amendment (10/22/2026).

Program coverage is narrow and specific, so check each program against your exact HTS line rather than assuming it does or doesn't apply.

The consequence for the SOP is simple. Record the exact HTS line, the base rate, each extra program and the date you checked. If you claim a free trade agreement rate, such as USMCA, keep the origin documents that support it, because the claim is only as good as the paperwork behind it.

Which government fees and broker charges belong in the calculation?

Duty is not the only thing the government collects, and the fee amounts changed this fall.

The Merchandise Processing Fee is charged as a percentage of the customs value on most formal entries. Customs broker Livingston International reported in its notice on CBP's fiscal year 2027 user fees that the MPF rate of 0.3464% is unchanged, while the minimum rose to $34.58 from $33.58 and the maximum to $670.86 from $651.50, effective October 1, 2026. Ocean shipments also pay a Harbor Maintenance Fee of 0.125%.

That minimum matters on small POs. A low-value entry still owes the $34.58 floor even when the percentage alone would come to less.

Then the private invoices: brokerage per entry summary, ISF filing, bond, terminal and chassis charges, demurrage if the box sits. Put each on its own line with its own source document. A single "customs and fees" lump hides which line moved when the total jumps.

What does a per-unit landed cost look like, line by line?

Here's a worked example, using illustrative figures: one ocean entry of 1,000 units, each costing $9.00 from the factory. The duty rate and the private fees below are examples only. Use the figures from your own HTS line and your broker's invoice.

In this example, the unit that cost $9.00 from the factory lands at $14.99. Most of that jump comes from the two tariff lines: $2,835 of the total, set by rates outside your control. The MPF minimum applies because 0.3464% of $9,000 is only $31.18.

Where do these numbers live in your Shopify admin?

Shopify holds two different things, and mixing them up is common. Your inbound landed cost per unit goes in the product's Cost per item field, so margin reports use the real number instead of the factory price. Update it with each new PO, and keep the entry number in your SOP log so anyone can trace where the figure came from.

The other thing is outbound: duties your customers pay at checkout on international orders. Shopify's duties and import taxes documentation sets the requirements. If you use shipping labels, you need a carrier that supports DDP labels. You cannot be using Shopify Fulfillment Network, and your products need HS codes applied. A transaction fee applies to every order where duties are calculated, even when the amount is zero. When the temporary lowered fee is not in effect, that fee is 0.85% with Shopify Payments as the primary gateway and 1.5% with another gateway. Orders shipped within the store's own country or region, orders between EU member countries, and abandoned checkouts are not charged.

Two checkout settings deserve a line in the SOP. The Section 232 steel and aluminum percentage defaults to 100%, applies to every covered product in the store, and cannot be set per product. Preferential treaties are on by default, and a customs authority may ask for a certificate of origin when one is applied. Shopify says to turn them off if you don't want to use them or cannot provide the documentation.

Missing an HS code does not stop the checkout calculation. Shopify says it then falls back to the product's description and category, and that a product with none of the three still gets duties calculated, though the result is likely to be inaccurate.

How do you write the calculation down as an SOP?

Write the procedure as steps that name a source document for each number, an owner, and a re-check trigger. A spreadsheet with hard-coded rates teaches nobody where the rates came from.

A usable shape:

1. Pull the supplier invoice and the Incoterm from the PO, noting the currency and exchange rate used.
2. Record the HTS line, the base rate, each extra tariff program, and the date you checked it.
3. Enter freight, insurance, brokerage, ISF and inland delivery from the forwarder and broker invoices, each on its own line.
4. Apply MPF with its current minimum and maximum, plus HMF on ocean entries.
5. Allocate shipment-level lines across SKUs by the method named in the SOP.
6. Update the product's Cost per item in Shopify with the per-unit landed cost, and log the entry number beside it.

Name the owners, not a department. The forwarder, the broker and your own team each own different lines on that list. This site's guide to who owns each step between a freight forwarder and a customs broker maps the split.

Four triggers should force a re-check rather than a calendar reminder, the same trigger-based maintenance loop this site applies to any procedure. They are new CBP guidance on a program covering your HTS line, CBP's annual user fee review, a changed supplier Incoterm, and a classification change.

The fee review is predictable. Livingston explains that CBP compares the CPI-U each year and must adjust the fees if the increase tops 1%. Classification is about to move too. The USITC has proposed updates to the HTS to implement about 300 sets of World Customs Organization amendments, and the US and other countries have until January 1, 2028 to put them in place.

Where does this calculation go wrong?

The usual failure is not arithmetic. It is a correct procedure followed with stale inputs.

Here's an illustrative failure mode worth watching for. A VA builds the quarter's PO from the saved sheet. The duty cell still holds a rate from two programs ago, so the per-unit cost ends up understated. Nothing in the file announces this, because nothing in the file records when the rate was checked. That is the whole argument for a dated source line per number. This site's write-up of SOP drift and audit risk covers what following the wrong version actually costs.

Two more ways it breaks. Racklify warns that underdeclaring value to reduce duty invites penalties and back duties if an audit catches it. And review capacity is a real limit. Nobody holds every SKU's classification and every program change in their head. That is why the SOP has to carry the check dates instead of the person.

Next step

Run the calculation once this week on the PO sitting in front of you, and write it down as you go: every line, its source document, and the date each rate was checked. That pass is the SOP. Hand it to whoever builds the next PO, with the four re-check triggers at the top.

ReccordSOP turns a screen recording of that work into a written SOP: numbered steps, a screenshot for each one, and the clicked element highlighted. Record the same task again next quarter and it compares the new recording against the existing SOP, showing which steps changed instead of silently overwriting the old version. Send it to someone as a checklist run and it records which version of the SOP they followed. The free plan covers 3 SOPs in total. Team is $19 per user per month, with a 3-user minimum.