The first time I imported a bedding order for Kind Loom, I priced it off my supplier invoice — the price per unit, plus a rough guess for shipping. By the time the goods actually landed in Calgary, I had paid duty, GST, brokerage, a currency markup I never saw coming, and delivery from the warehouse. My “$10 blanket” had quietly become almost $16. That gap is landed cost, and if you ignore it, you will under-price and wonder where your margin went.

What landed cost actually means

Landed cost is the total amount it costs to get a product from your supplier’s door all the way to your shelf (or warehouse) in Canada, ready to sell. It is not the invoice price. It is everything you spend to make that product sellable here. If you set retail prices off the supplier invoice alone, you are almost certainly leaving margin on the table — or losing money on every unit.

The full landed cost formula

Here is the way I break it down, line by line:

• Product cost — the price you pay the supplier, ideally at a known Incoterm (like FOB port of origin) so you know exactly what is and isn’t included.
• International shipping — ocean or air freight, plus origin charges, terminal handling, and any port fees.
• Duty — a percentage of the customs value, based on your product’s HS classification in the Customs Tariff. Rates vary widely by product, so look yours up.
• GST on import — 5% GST is charged at the border on most commercial imports.
• Brokerage — what a customs broker charges to clear your shipment (entry prep plus disbursement fees), if you use one.
• Currency conversion — the spread and fees your bank adds when you pay an overseas supplier in USD or INR. This one is sneaky and easy to forget.
• Last-mile — trucking or courier from the port or bonded warehouse to your location.

Add all of that up, divide by the number of units, and you have your true cost per unit.

A worked example

Say I order 500 units of bedding at CAD $10 each on FOB terms:

• Product cost: 500 × $10 = $5,000
• International shipping (an LCL ocean shipment): $1,200
• Duty — textiles like cotton bed linen often sit in the high-teens percent, but it varies by exact classification, so confirm in the Customs Tariff. At roughly 18% on a customs value of $5,000: $900
• GST — 5% is charged on the customs value plus duty ($5,000 + $900 = $5,900): $295
• Brokerage: $150
• Currency conversion — a typical bank can add 2–3% on an international transfer; on $5,000 that is roughly $125
• Last-mile delivery in Calgary: $200

Total landed cost: $7,870. Divide by 500 units and your true cost is $15.74 per unit — not $10. That is 57% more than the invoice price. If I had set a retail price using a 2.5x markup on $10 ($25), my actual margin would be far thinner than I thought, and on a heavier or higher-duty product it could vanish entirely.

Why founders under-price

Almost every new importer I talk to does the same thing I did: they anchor to the supplier price because it is the number on the invoice, the number that feels real. Freight, duty, GST, and brokerage arrive later, in separate bills, from different companies, sometimes weeks apart. Because they are spread out, they never feel like part of “the cost of the product” — but they are. GST you can often recover as an input tax credit if you are registered, but duty, freight, brokerage, and currency spread are real, permanent costs baked into every unit.

Taming the currency line

The currency conversion cost is the one most people never see, because the bank bakes its markup into the exchange rate rather than showing it as a fee. On a $5,000 payment, a 2–3% spread is $100–$150 gone before your supplier even ships. I moved my supplier payments to Wise so I pay closer to the real mid-market rate with a transparent fee, which shaves real dollars off every order and makes my landed cost easier to predict. Whatever tool you use, treat the conversion cost as a line item — not a rounding error.

Build it into a spreadsheet

The habit that fixed this for me was building one simple landed-cost sheet: each cost as its own row, totalled, divided by units. Before I place any order now, I fill it in with quotes — freight quote, estimated duty from the tariff, GST at 5%, brokerage estimate, currency spread, and delivery. It takes ten minutes and it is the difference between pricing on hope and pricing on math. When a freight rate spikes or the dollar moves, I update one cell and instantly see what it does to my margin.

Landed cost is not the exciting part of running a product business, but it is the part that decides whether the business works. Get the full picture before you set a price, not after the invoices arrive.

This is based on my own experience — not financial, tax, or legal advice. Rules, rates, and fees change, so confirm current details with official sources like the CRA and CBSA before you decide.