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What's the actual difference between COGS and landed cost, and why does mixing them up wreck my margins?

COGS is the accounting line, what a unit cost you once it's sitting in inventory, ready to sell. Landed cost is the fuller number: product cost plus freight, insurance, customs duty, IGST, brokerage, everything it took to get that unit to your dock. Price off your factory invoice alone and you'll quietly bleed margin on every sale, because duty and freight alone can add a large chunk to what the supplier quoted you.

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3 resources, 3 link-checked.

📄 Article
✓ Link checked Free Beginner

An ecommerce-accounting platform's clear breakdown of what belongs in landed cost versus COGS, the exact confusion that quietly wrecks new founders' margins.

Understanding Landed Costs for Ecommerce

From a2xaccounting.com by A2X

  • Landed cost is the total cost to get a sellable unit to you
  • COGS is a subset of landed cost, not the whole thing
  • Freight/duty invoices can arrive after the sale, allocate them back
Open a2xaccounting.com
📄 Article
✓ Link checked Free Beginner

An ecommerce-accounting firm's step-by-step COGS formula, useful as the accounting-correct companion to the more operational landed-cost guides.

How to Calculate Cost of Goods Sold (COGS)

From ledgergurus.com by LedgerGurus

  • COGS = Beginning Inventory + Purchases - Ending Inventory
  • Extended formula adds freight-in, subtracts discounts and returns
  • COGS drives gross profit on your P&L directly
Open ledgergurus.com

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