What is a landed cost? A plain English guide for UK sellers

If you've started researching post-Brexit EU shipping, you've probably come across the term "landed cost." It sounds technical but the concept is straightforward — and understanding it could save you from some of the most common and costly mistakes UK sellers make when shipping to Europe.

What landed cost actually means

The landed cost of a shipment is the total amount your customer pays to receive your product at their door. It includes everything — not just what they paid you, but every charge assessed along the way.

For a UK-to-EU shipment, the landed cost typically has four components:

1. Product price — what your customer paid you at checkout.
2. Shipping cost — what it costs to get the parcel from your door to theirs.
3. Import duty — a tax assessed by EU customs on the value of the goods.
4. Destination VAT — the importing country's VAT rate applied to the total value of the shipment.

Add all four together and you have the landed cost — the true total cost of getting your product into your customer's hands.

Why landed cost matters for UK sellers specifically

Before Brexit, the landed cost of a UK-to-EU shipment was simple: product price plus shipping. No duty, no destination VAT, no customs complexity.

Post-Brexit, components 3 and 4 have been added. For many shipments — particularly those above the €150 threshold — the landed cost is significantly higher than the price your customer paid at checkout. The difference lands on their doorstep as an unexpected bill.

A real example

A UK seller ships a leather bag worth £220 to a customer in Italy.

The customer paid £235 at checkout. The true landed cost is £307. The gap — £72 — arrives as a VAT bill when the courier delivers. If nobody told the customer this was coming, the relationship is damaged before the product is even unwrapped.

How to calculate landed cost before you ship

You could calculate it manually — look up your product's commodity code, find the applicable duty rate, apply the destination country's VAT rate to the CIF value. It takes 20–30 minutes if you know what you're doing.

Or you can use ClearShip. Enter your product description, value, weight and destination country, and ClearShip calculates the full landed cost in seconds — including the correct duty rate for your product category and the destination country's VAT rate. It's free to try.

What to do with the landed cost figure

Once you know the landed cost, you have options. You can communicate it to your customer upfront so they know what to expect. You can build it into your pricing so the landed cost equals what they pay at checkout. Or you can use it to decide whether a particular EU market is commercially viable for your products at your price point.

All three are better than the alternative — shipping without knowing and hoping for the best.