Landed Cost Calculation

Landed Cost Calculation Issues and Challenges

Global sourcing professionals must weigh import controls, duties, freight costs, and many other factors into a purchase decision. Due to the fact that companies often don't have enough time or resources to analyze and optimize every potential scenario, they may miss opportunities for savings and tax reductions.

The number of variables that go into calculating total landed cost, and in weighing the number of potential scenarios, makes manual computation nearly impossible. Both importers and exporters must have a clear understanding of estimated landed cost to correctly set prices, make accurate sourcing decisions, and assess transportation options.

Challenges include:

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Calculating the total landed cost outcomes for multiple sourcing scenarios, while also adhering to prescribed business rules

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Creating comparable views of alternative sources of supply that consider all facets of total landed cost

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Accounting for the impact of regulatory controls, such as licensing, permit requirements, and quotas

How Amber Road Can Help
Amber Road's planning tools allow you to compare sourcing scenarios to inform your purchasing decision. By providing specific inputs, such as product classification, source and destination countries, INCOTERMS, etc., you can see a detailed analysis of the specific supply source and understand the effect on the estimated landed cost when variables are changed. Tweaking these scenarios allows procurement professionals to gain a more complete picture of overall cost, time to delivery, route, and compliance implications associated with each sourcing decision.

Amber Road makes it possible to factor the complete spectrum of landed cost components - including the duties, taxes and fees imposed by governments worldwide - into the picture. Our landed cost calculations use the global trade content that is constantly updated and maintained in our Global Knowledge^®database.

Features	Benefits
Accurate Landed Cost Calculation	▪	Compare estimated landed cost to and from multiple locations
	▪	Calculate the final landed cost for a shipment in terms of duties, excise tax, value-added tax, provincial taxes, profit taxes, statistical taxes, customs fees, port charges, and all other import taxes and accessorials
	▪	Display the tax formula in effect for each scenario
	▪	Include estimated transportation and insurance costs
Export Compliance Information	▪	Highlight specific barriers from the country of export, such as absolute embargoes, prohibitions or license requirements
Import Compliance Information	▪	Highlight specific barriers from the country of import such as anti-dumping duty, licenses, permits, quotas and visa restrictions
Save and Reuse Scenarios	▪	Save and reuse previous examples, modify assumptions and view new results

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Landed Cost Calculation

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