What landed cost includes
Landed cost is supplier purchase price plus directly attributable inbound costs to a New Zealand sale-ready location: freight, insurance, port/terminal charges, customs/broker fees, import handling, warehouse transport, and required inspection, relabelling or preparation. Include applicable duty, confirming tariff treatment and classification separately. GST is 15% (Inland Revenue (Te Tari Taake)); include it only when irrecoverable; otherwise track it separately. Exclude rent, salaries, software, advertising, payment fees, discounts, returns processing and customer delivery after the product is ready for sale; separating these operating, marketing and downstream costs compares importing with selling and operating (Source: Inland Revenue (Te Tari Taake)).
Duty and classification basics
Customs duty depends on tariff classification, not a Shopify listing or invoice. Describe each item by type (wax, polish, cleaning preparation, lubricant or aerosol), formulation, intended use and packaging. Classification sets whether duty applies and its rate; “car care supplies” may produce a wrong landed-cost estimate.
Keep duty separate: it is an import tax based on classification and customs value. GST is separate: Inland Revenue (Te Tari Taake) states that GST in New Zealand is charged at a rate of 15%. Record freight, insurance, port or handling, customs-broker and other clearance charges separately as operating or logistics costs, so freight changes are not mistaken for tariff changes. Confirm classification and treatment with New Zealand Customs or a qualified broker (Source: Inland Revenue (Te Tari Taake)).
| Charge | What determines it |
|---|---|
| Customs duty | Tariff classification and customs valuation |
| GST | New Zealand’s import tax treatment; 15% GST rate |
| Freight and insurance | Carrier, route, shipment terms and cargo value |
| Clearance and handling | Broker, port, warehouse or service-provider charges |
Worked example with sample numbers
This example is illustrative. It uses sample numbers for a car care products store selling in New Zealand. They are made up to show the method, they are not a benchmark, and your own figures will differ.
Formula: Landed unit cost = (supplier cost + freight + duty + fees) / units.
| Line | Shipment | Per unit |
|---|---|---|
| Supplier cost | NZ$44888.43 | NZ$52.81 |
| Freight | NZ$3910.77 | NZ$4.60 |
| Duty | NZ$3793.72 | NZ$4.46 |
| Broker and handling | NZ$152.00 | NZ$0.18 |
| Landed cost | NZ$52744.93 | NZ$62.05 |
Run the same sum with your own numbers in the free calculator, or browse guides for sellers in New Zealand and more car care products guides.
General information only: tax, duty and import rules change and depend on your situation, so check with an accountant or the official source before acting.
Eligible Shopify stores can see these numbers for their own store through the Founding 10,000 offer.
Allocating freight to units
Assign charges that cover the whole shipment before calculating a per-unit landed cost. If freight is $600, insurance $60 and a shared handling charge $90, the pool is $750. Keep product purchase cost, duty, GST and other tax lines separate; allocate only the shared logistics charges here. Any charge that the carrier or broker identifies for one product should be assigned directly to that product, not spread across the shipment.
Choose one defensible basis and apply it consistently within the shipment. For a weight basis, if Product A represents 120 kg of a 600 kg shipment, its allocation is $750 × 120 ÷ 600 = $150. If those 50 units are identical, add $3 per unit. Product B receives the remaining $600, divided across its units. Weight suits products with materially different weights; volume can suit bulky items, while customs or invoice value can suit charges driven by declared value. Record the basis, shipment total and allocation formula so the result can be reproduced and compared with supplier and broker documents.
A cost schedule that keeps each charge visible
Use one row for every charge rather than combining “shipping and fees.” Record the supplier invoice, currency, quantity, shipment reference and the rule used to allocate each amount. This makes a rate change or new invoice easy to update without rebuilding the whole calculation.
Keep GST visible even when you later exclude it from a management cost measure. Inland Revenue states that GST in New Zealand is charged at 15%. Record the taxable base, GST amount and whether the amount is treated as a cost for your reporting policy. Store the supporting invoice, Customs entry or broker statement beside each row (Source: Inland Revenue (Te Tari Taake)).
| Charge | What to record | Calculation or allocation basis | Source and check |
|---|---|---|---|
| Supplier price | Product, quantity, unit price, currency | Unit price × units | Supplier invoice; match SKU and quantity |
| Duty | Tariff classification, rate and amount | Customs value × applicable rate | Customs assessment; verify classification |
| Freight and insurance | Carrier, invoice and shipment amount | Allocate across units using the selected shipment basis | Freight or insurance invoice |
| GST | Taxable base and tax amount | Taxable base × 15% | Customs or tax document; Inland Revenue |
| Brokerage and clearance | Broker, entry or service fee | Allocate by shipment, line or unit | Broker invoice |
| Other charges | Storage, port, bank, inspection or handling fees | Use the charge’s actual coverage | Receipt or supplier statement |
How to read the worked landed-cost example
Read left to right: check product invoice, freight, insurance, duty and shared charges; add assigned shipment costs and divide by sale-ready quantity. NZ$4,000 products + NZ$600 freight + NZ$60 insurance + NZ$90 handling = NZ$4,750; 500 units = NZ$9.50 per unit.
Treat assumptions as variables, not New Zealand-wide rates: supplier price, exchange rate, quantity, freight quote, duty, allocation method and whether recoverable GST is included. Change one at a time; confirm treatment with your accountant. Inland Revenue states that GST in New Zealand is charged at a rate of 15% (Source: Inland Revenue (Te Tari Taake)).
Use the example to understand the calculation, not to price every product: route, classification, order size, currency and service charges may differ. Test your figures with the product pricing calculator.
Rules to confirm before importing to New Zealand
For each shipment, check Customs’ Working Tariff for description, code, origin, value, currency, importer, Incoterm and origin evidence; confirm duty and import GST with Customs and Inland Revenue. GST in New Zealand is charged at a rate of 15% (Inland Revenue (Te Tari Taake)). Record whether GST is payable, recoverable or included in supplier or marketplace charges. For chemicals, verify dangerous-goods, EPA, MPI and Customs requirements; ensure compliant labels match the formulation. Keep shipment, invoice, packing, permit, certificate, SDS, freight and insurance records together, and recheck when shipment details change (Source: Inland Revenue (Te Tari Taake)).
Choose the measure for the decision
Choose the measure for the decision: supplier cost, landed unit cost, cash required and selling margin answer different questions. A product quoted at $8 may have $3 per unit in freight, duty and other import charges, making landed cost $11. At $24, gross margin before other operating costs is ($24 − $11) ÷ $24 = 54.2%, not 66.7% from supplier cost alone. Test the price with the product pricing calculator.
- Supplier cost: compare quotes and negotiate before shipping and import charges; it is insufficient for a New Zealand selling price.
- Landed unit cost: review pricing and product profitability, including what each sale must recover after reaching your sale-ready location.
- Cash required: plan purchasing and cash flow. Ordering 500 units at $11 landed cost represents $5,500, before payment timing, deposits or tax treatment; it follows when money leaves, not unit cost assignment.
- Selling margin: assess gross profit after landed cost, alongside discounts, returns and operating costs.
| Measure | Right decision |
|---|---|
| Supplier cost | Compare and negotiate purchase terms |
| Landed unit cost | Set prices and compare product economics |
| Cash required | Approve orders and plan funding |
| Selling margin | Review profitability at the selling price |
A reliable landed-cost model keeps supplier price, duty, freight, tax and import charges on separate lines before dividing the relevant total by saleable units. Confirm the applicable New Zealand rules for each product and shipment, then use the resulting unit cost consistently in pricing and profitability decisions.
Sources
- GST (goods and services tax) (Inland Revenue (Te Tari Taake), checked 26 October 2026).
- Registering for GST (Inland Revenue (Te Tari Taake), checked 26 October 2026).
- GST on low-value imported goods (Inland Revenue (Te Tari Taake), checked 26 October 2026).
How this page was made: drafted with AI from a brief, then checked by automated rules for arithmetic, sources and duplication. The sample numbers were calculated, not reported.