Landed Cost: What a Garment Really Costs by the Time It Reaches You
By The Velocity Wear Team
Buyers compare quotes on unit price because it is the number on the email. It is also the number least likely to determine what you actually pay. Landed cost — the total to get a garment into your hands, ready to sell — routinely differs from unit price by a margin large enough to reverse which supplier was cheaper.
The components
- 1**Unit price.** The per-garment cost, at your quantity, including decoration.
- 2**Freight.** Sea, air or road, plus origin and destination handling. Per-garment freight falls sharply with volume, which is why it changes comparisons between a small and large order.
- 3**Duty.** A percentage of the customs value, set by the commodity code of the item and where it was made. This is the component that moves with politics.
- 4**Import VAT or sales tax,** which is usually recoverable if you are registered but still affects cash flow.
- 5**Customs clearance and brokerage.** Per-shipment rather than per-garment, so it hurts small orders disproportionately.
- 6**Currency.** If you are invoiced in a currency you do not hold, the rate on the payment date is part of the price.
- 7**Holding cost.** Storage, insurance, and the cash tied up until it sells. Rarely counted and often the largest hidden item.
How to actually calculate it
Take the total of everything above for the whole shipment and divide by the number of sellable units. Sellable is the word doing the work — if 3% arrives damaged or in sizes you cannot shift, they are cost, not stock.
Do it per order rather than per style. Fixed per-shipment costs mean the same garment has a different landed cost in a 50-piece order and a 500-piece one, and treating them as the same number is how small orders quietly lose money.
Where the surprises usually are
- **Per-shipment fixed costs on small orders.** Clearance and handling do not scale down. On a 20-piece order they can be a meaningful share of the total.
- **Duty on the wrong commodity code.** Codes are specific about fibre content and construction, and a wrong code means a wrong rate — payable retrospectively when corrected.
- **Duty on freight.** Customs value often includes the cost of getting the goods to the border, so freight can be dutiable rather than a separate line.
- **Air freight taken to hit a deadline.** The single most common way a well-planned order becomes an expensive one.
- **Currency movement** between quote and payment on a long lead time.
What removes whole categories of this
Buying delivered — where the supplier handles freight, clearance and duty and quotes you a landed price — removes the estimating problem entirely. You compare one number to another number. It is usually not the theoretical cheapest route, and for most buyers it is the one that produces the fewest expensive surprises.
Being invoiced in your own currency removes another category. We invoice in seven currencies for exactly this reason: a quote you can compare against your own budget without a spreadsheet is worth more than a marginally better rate you have to convert.
The comparison worth making
When you have two quotes, get both to landed cost per sellable unit before deciding. Then ask the second question, which is when the money leaves: a deposit six months before delivery is a real cost even if it never appears in the unit price.
