What one unit actually costs you sitting in your warehouse, ready to ship: the FOB (factory) price plus inbound freight, duties and tariffs, and customs handling. Landed cost is your real COGS, and every margin number should run on it. The mistake is modelling off the factory price because it is the number on the invoice - for China-sourced goods post-2025, landed cost typically runs 40-80% above FOB, so the FOB modeller has overstated contribution margin before selling a thing. Tariff and freight volatility now moves this number with little warning, so stress-test it as a scenario, not a fixed input.
Benchmark. As a rule of thumb, landed cost runs 1.3-1.8x the factory gate price, and 40-80% above FOB for China-sourced goods post-2025. Model every SKU at landed cost and use it as your pricing floor; re-model whenever tariffs or freight move.