How to calculate landed cost for TikTok Shop
By CogsIQ. Published 4 October 2026.
Landed cost is what one unit cost you by the time it was ready to sell: the supplier's price plus its share of everything it took to get it there. On TikTok Shop, where fees and fulfilment already take a large slice of each sale, getting this number wrong by even a dollar can turn a product you think is profitable into one that loses money on every order.
What goes into landed cost
Count every cost that was needed to turn a supplier's order into units you can sell:
- The goods. The price per unit on the supplier's invoice.
- Freight. Often in two legs: the supplier's delivery to your forwarder, which may be on the supplier's invoice, and the international shipment, which is usually billed separately and later.
- Customs and duty. Import duty, customs fees and any import tax you cannot reclaim.
- Prep. Labelling, bagging and other work needed before a warehouse will accept the stock.
- Other order costs. A payment-processing charge on the purchase, inspection fees, and similar costs tied to that order.
The rule of thumb: if the cost would not exist without that purchase order, and it was needed to make the units sellable, it belongs in landed cost.
What stays out of it
Some costs feel like part of the product but are charged per order or per month instead. Putting them in landed cost counts them twice, because they also appear where they are actually charged:
- Fulfilment. The Fulfilled by TikTok fee or your 3PL's handling is charged per order, when the order ships.
- TikTok's fees. Commission, affiliate commission and shipping charged to you come off each settlement.
- Storage. Warehouse storage is billed by the warehouse over time, not per unit you bought.
- Overheads. Software, design work and ads are costs of running the shop, not of one batch.
A worked example
One purchase order holds two products. The supplier invoice is $3,800, the forwarder bills $500 for freight, and duty comes to $380.
| Line | Units | Unit price | Line value |
|---|---|---|---|
| Product A | 600 | $3.00 | $1,800.00 |
| Product B | 400 | $5.00 | $2,000.00 |
Freight tracks how much space and weight the units take, so split it by units: 1,000 units in all, so $0.50 a unit. Product A carries $300 and Product B $200.
Duty is charged on value, so split it by line value: Product A is $1,800 of $3,800, so it carries $180, and Product B carries $200.
| Line | Goods | Freight | Duty | Total | Per unit |
|---|---|---|---|---|---|
| Product A | $1,800.00 | $300.00 | $180.00 | $2,280.00 | $3.80 |
| Product B | $2,000.00 | $200.00 | $200.00 | $2,400.00 | $6.00 |
Product A's supplier price was $3.00, but each unit cost $3.80 to land: 27% more. A margin worked out on $3.00 would be wrong on every sale.
Divide by the units that actually arrived. If only 380 of Product B's 400 units arrive, its $2,400 is spread over 380 sellable units, which is $6.32 each. The missing 20 are a claim against the supplier, not stock.
Choosing how to split a cost
- By units when the cost follows quantity, size or weight. Most freight.
- By value when the cost follows what the goods are worth. Duty, insurance, a percentage payment fee.
- By hand when you know better, such as a carton of one product shipped on its own. Check that the shares add up to the invoice.
- Only some lines when a cost paid for part of the order, such as labels for the units going to Fulfilled by TikTok.
Whatever the method, round so the shares add back to the invoice exactly. Splitting $100.00 three ways should give $33.34, $33.33 and $33.33, not three lots of $33.33 and a lost cent. Lost cents add up across hundreds of purchase orders, and an allocation that does not sum to the invoice cannot be checked against it.
When an invoice arrives late
The international freight bill often arrives weeks after the goods, and by then some units have sold. Add the invoice to the purchase order it belongs to and recalculate. Then the hard part: the units already sold were costed too low, so last month's profit was overstated.
In a spreadsheet that means finding every sale from that batch and correcting it by hand. It is the step most often skipped, which is why margins in spreadsheets drift upward. A system that costs each sale against its batch can re-cost those sales for you.
Using it on TikTok Shop
Landed cost is the cost-of-goods line in every profit figure: profit per unit, per SKU, per batch and per shop. Put it into the TikTok Shop profit calculator beside your price and fees to see what one sale keeps.
When the same product is bought more than once at different costs, keep each purchase as its own batch rather than averaging them. FIFO batch costing explains why an average hides which purchase made money.