Landed cost for furniture imports
Furniture is bulky, often low in value per cubic metre and, in some markets, heavily tariffed. That combination makes landed cost — not the factory price — the number that decides whether a product line makes money.
The formula
Landed cost = goods + international freight + insurance + duties + additional duties + customs fees + import VAT/GST (if not recoverable) + brokerage + port and inland charges + other costs.
Divide by units for cost per piece, then apply your margin. Two details change the result more than people expect:
- Valuation basis. The U.S. and Canada levy ad valorem duty on transaction value (close to FOB). The EU, UK, India and most others use CIF, so freight and insurance are taxed too. Expensive freight therefore raises duty in CIF countries.
- Additional measures. Trade-remedy duties, national-security tariffs and retaliatory duties sit on top of the base rate. For many furniture lines the base U.S. rate is zero, while an additional measure is 25%.
Worked example: 120 upholstered sofas into the U.S.
Assume a factory invoice of US$20,000 FOB, ocean freight of US$3,500 for a 40' HC, insurance US$60, base duty 0% and a 25% additional duty.
| Line | Basis | Amount (USD) |
|---|---|---|
| Goods | Invoice | 20,000.00 |
| Freight + insurance | Quote | 3,560.00 |
| Additional duty 25% | FOB value | 5,000.00 |
| MPF 0.3464% | Value, within min/max | 69.28 |
| HMF 0.125% | Value (ocean) | 25.00 |
| Broker, inland, other | Quotes | 1,300.00 |
| Total | 29,954.28 | |
| Per sofa | ÷ 120 | 249.62 |
The factory price was US$166.67 per sofa. Landed, it is roughly US$250 — a 50% uplift, with duty as the largest add-on. At the scheduled 30% rate from 1 January 2027, the duty line rises by US$1,000 and the per-unit cost by about US$8.33.
The costs people forget
- Origin charges under FOB: export clearance and terminal handling at origin are usually the seller's, but check your quote.
- Destination terminal handling, chassis and demurrage. Slow unloading of a 40' HC of sofas can trigger daily fees.
- Customs bond (U.S.) — single-entry or continuous.
- Exams. Random inspections add drayage, exam and storage costs.
- Damage allowance. Budget 1–3% for transit damage on upholstery and glass.
- Currency. A 3% FX move on a 60-day order can erase a thin margin.
How to reduce landed cost legally
- Cut volume. Knock-down designs and roll-packed mattresses can raise units per container dramatically; see the container calculator.
- Classify correctly. Over-classification costs money too; confirm with a broker.
- Review origin. Rates differ by country of origin; caps apply for some partners. Origin is set by substantial transformation rules, not by where goods are shipped from.
- Use drawback where goods are re-exported.
- Negotiate Incoterms. In CIF-valuation countries, cheaper freight bought by you can lower the duty base.
Illustrative figures only. Fees and rates change; confirm with your broker. Not legal or tax advice.