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  • #979065
    Karisha Trading
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    Hi,

    I am new to flyingsolo.com.au and would like to ask a question on ‘Landed Costs’.

    I am soon to start trading as a wholesaler with 100% of the products I sell being from imports.

    Transport in is being included to work out COGS.

    1. Should I included all costs associated to getting the product to my door as landed costs? I.e. Port Charges, Customs Duty, Tariffs, GST etc…?

    2. Should I add GP to COGS (CIF) or ‘Landed Cost’ to work out selling price?

    3. Is my approach of adding GP% to either COGS or ‘Landed Cost’ the right way to setting prices?

    Many thanks

    #1111744
    MyGreatIdea
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    Karisha Trading, post: 124388 wrote:
    1. Should I included all costs associated to getting the product to my door as landed costs? I.e. Port Charges, Customs Duty, Tariffs, GST etc…?

    Yes and they are commonly referred to as Direct Costs, except for GST which you shouldn’t factor at all unless you are not registered for GST. Any other expenses, such as telephone, motor vehicle, stationery etc, are classed as Expenses or Admin Expenses and reduce your overall profit.

    2. Should I add GP to COGS (CIF) or ‘Landed Cost’ to work out selling price?

    3. Is my approach of adding GP% to either COGS or ‘Landed Cost’ the right way to setting prices?

    Your selling price should factor in ALL your costs, both direct and expenses. It’s pointless setting a selling price based on your landed cost, if your other expenses are going to take all the profit. Having said that, I believe you should set your selling price based on what the market will pay, and then do the sums to ensure your profit is there. And this should be done before you start buying stock.

    Wendy :)

    #1111745
    Divert To Mobile
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    I agree with Wendy, but would also like to add the cost of you.
    What I mean by that is what could you go out and earn if you were doing this same job for someone else.

    Steve

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