The full cost of an imported item including freight, insurance, customs duty and handling, not just the supplier price.
Landed cost is the total cost of getting a purchased item onto your shelf: the supplier's price plus freight, insurance, customs duty, clearing agent fees, port charges and inland transport. For a UAE trader or manufacturer importing through Jebel Ali or by air, these extras can add a meaningful percentage to the supplier price.
It matters because margin decisions based on supplier price alone are wrong. If the ERP values stock at the invoice price and expenses the freight separately, gross margin by product is overstated, slow-moving stock is undervalued, and pricing to customers drifts. Owners of trading and distribution businesses feel this most.
In an ERP project, decide the allocation rule up front: by value, by weight, by volume or by quantity, and whether duty is allocated differently from freight. Confirm the platform can apply landed costs to a receipt after the fact, when the forwarder's invoice arrives weeks later. Odoo, SAP Business One, NetSuite and Business Central all support this, with different levels of effort.
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