Dropshipping Home Goods Landed Cost in Singapore: From Supplier to Shelf

From Supplier Price to Landed Unit Cost

Landed unit cost is the cost of getting one sellable home-goods unit into Singapore. It is the figure to use when deciding whether a supplier quote can support your target economics. Calculate it as the total cost required to make the unit sellable in Singapore, divided by the number of sellable units. The remaining sections cover which costs belong in that total and how to allocate shared freight.

A supplier quote is only the starting purchase price. For illustration only, a supplier may quote S$12 per organiser, but your landed unit cost may be S$18 after the unit reaches Singapore. The S$12 figure helps compare suppliers; the S$18 figure helps set a viable price and assess product economics. Retail price is different again: a S$35 selling price describes customer revenue, not your cost or profit.

Contribution margin answers a later question: how much remains after landed cost and other variable selling costs, such as payment or advertising costs, for each sale. With S$35 revenue, S$18 landed cost and S$9 other variable costs, contribution is S$8, or 22.9% of revenue. Use landed cost to evaluate sourcing and pricing; use contribution margin to decide whether to scale, reduce or stop promotion. ORVX calculates product profitability and reports contribution after advertising by product and collection.

What landed cost includes

For a dropshipping home-goods store, landed cost should capture every cost required to make one unit available for sale in Singapore: the supplier’s product charge, supplier-side packing or preparation, international freight, cargo insurance, import duty where applicable, import GST, customs or broker charges, and destination handling fees. If a third party inspects, labels, repacks or kits the product before it can be sold, include that cost too.

Keep costs outside landed cost when they occur after the product is ready for sale. Singapore-to-customer delivery, payment processing, advertising, Shopify fees, refunds and customer-service labour belong in contribution or net-profit analysis instead. A returned item is not a new landed-cost component; it is a separate return, refund or inventory event.

GST needs a tax treatment decision, not an automatic addition. The Inland Revenue Authority of Singapore states that the current GST rate is 9%. A GST-registered business may track recoverable import GST separately from its economic product cost, while a non-registered business generally needs to assess it as a cash cost. For low-value goods, sales value of S$400 or below imported by air or post, an overseas GST-registered supplier may charge GST at checkout, so do not count that charge twice (Source: Inland Revenue Authority of Singapore).

Use the resulting product cost in a product pricing calculator, then compare it with contribution after advertising rather than supplier price alone. See Singapore seller guides for the import assumptions that need confirmation.

Duty and classification basics

Classification comes before the arithmetic. A home-goods product’s HS code is determined by characteristics such as its material, construction and function, not by the supplier’s marketing name. The code can affect whether customs duty applies and which import treatment you should model. Ask the supplier for the proposed HS code, then verify it against the product you are actually selling; a wrong code can make the per-unit estimate misleading.

Duty and GST are separate lines in your model. Duty depends on the product’s tariff classification and applicable treatment. GST is a consumption tax: the Inland Revenue Authority of Singapore states that the current GST rate is 9%. Whether import GST is a recoverable cash cost also depends on the business’s GST position, so do not automatically treat it as margin cost or ignore it (Source: Inland Revenue Authority of Singapore).

For air or post shipments, the low-value-goods rule needs separate attention. IRAS defines low-value goods as goods with a sales value of S$400 or below imported into Singapore by air or post; a GST-registered overseas supplier charges GST at the point of purchase. This is not the same question as whether customs duty applies.

Allocating freight to units

Allocate each shipment’s freight across the units it contains before calculating a landed unit cost. If a shipment costs S$120 to deliver and contains 30 identical storage baskets, assign S$4 freight to each basket. For mixed home goods, an equal split can distort profitability: a lightweight cushion and a bulky lamp should not automatically absorb the same freight amount.

Choose the allocation base that best explains the carrier’s charge, then use it consistently in your product-cost model. Keep the shipment total unchanged after allocation: the unit-level freight amounts should add back to the actual invoice. Review the method when carton sizes, order mix or shipping routes change.

Rules to confirm before importing to Singapore

Before placing an order, confirm the import treatment for the exact product and shipping route. Ask the supplier for the commercial invoice description, country of origin, material, unit value and delivery term. Check that the description matches the product you will actually sell; a vague description can create problems when documents are reviewed.

Confirm whether the item requires an import permit, product approval, safety documentation or specific labelling in Singapore. This matters for home goods such as electrical items, children’s products, cookware and materials that may contact food. Keep the supplier’s documents, product specifications and any approval records together with the order.

Then confirm who collects GST and how it enters your cost model. The Inland Revenue Authority of Singapore states that the current GST rate is 9%. Low-value goods are goods with a sales value of S$400 or below imported into Singapore by air or post; a GST-registered overseas supplier charges GST at the point of purchase. Do not also treat that same GST as an import cash payment without checking the transaction documents (Source: Inland Revenue Authority of Singapore).

Finally, check your business registration position. IRAS says a Singapore business must register for GST when taxable turnover for a calendar year exceeds $1 million, or when it expects taxable turnover of more than $1 million in the next 12 months. Record whether GST is charged at checkout, collected at import, or included by the supplier before comparing supplier quotes. For more Singapore-specific checks, see these Singapore seller guides (Source: Inland Revenue Authority of Singapore).