Landed cost is the total price of the product once it has arrived at the buyer’s doorstep—not necessarily just the amount on the supplier’s invoice. To identify what lies beyond the invoice, check the agreed delivery terms and reconcile the invoice with every additional charge required to bring the product to its destination.
Start with the agreed Incoterm
Read the Incoterm stated in the sales contract. The U.S. International Trade Administration notes that the agreed Incoterm often determines whether the buyer or seller pays duties and taxes.
The invoice price therefore should not be treated as the complete landed cost without checking the contract. A useful working structure is:
Landed cost = supplier’s invoice price + confirmed charges outside that invoice
Only amounts supported by the contract, supplier quotation, invoices, or other transaction documents should be included.
What to check in Hong Kong
Hong Kong’s Trade and Industry Department says that Hong Kong is a free port and does not levy a customs tariff on imports or exports. This removes customs tariffs from the calculation, but it does not by itself establish which party is responsible for duties or taxes under a particular sales contract.
The Incoterm and the rest of the contract still need to be checked. A general statement about Hong Kong customs tariffs cannot settle a transaction-specific allocation between buyer and seller.
What you still need to confirm
Before treating the supplier’s invoice as a delivery-inclusive landed cost, confirm:
- Which Incoterm applies under the sales contract.
- Whether that Incoterm places duties and taxes on the buyer or seller.
- Whether the invoice already includes all charges needed to bring the product to the destination.
- What additional amounts are documented as payable outside the invoice.
Neither cited source provides a complete cost breakdown for an individual order. That calculation must therefore be based on the documents covering the specific transaction.