Landed Cost Guide for Canadian Importers
Understanding your true landed cost is the difference between profitable importing and losing money. This guide breaks down every cost component of importing from China to Canada — so you can price your products accurately and protect your margins.
Short answer
Landed cost = product cost + freight + insurance + customs duty (0–18%) + GST/HST (5–15%) + brokerage fees + last-mile delivery + packaging. For most consumer goods imported from China, the landed cost is typically 40–80% higher than the FOB factory price. CheapBulk provides detailed landed cost estimates before you place orders.
What Is Landed Cost?
Landed cost is the total expense of getting a product from a manufacturer's factory in China to your hands in Canada. It includes every cost incurred along the way — not just the price you pay the supplier.
Many first-time importers make the mistake of pricing their products based solely on the FOB supplier quote. They discover too late that freight, duties, taxes and handling add 40–80% to the product cost — wiping out their expected profit margin.
Calculating an accurate landed cost before placing your order is essential. It tells you whether a product is actually profitable at your target selling price, and allows you to compare suppliers on a true cost basis — not just factory price.
Landed Cost Components
Product Cost (FOB Price)
The price per unit from the manufacturer, typically quoted FOB (Free On Board) — meaning the price includes delivery to the Chinese port. This is your base cost before any import expenses. CheapBulk negotiates FOB prices directly with factories to secure the best per-unit cost.
International Freight
The cost of shipping from China to Canada. Sea freight (FCL) runs $2,500–$5,500 per 20ft container; LCL is $60–$150 per CBM; air freight is $4–$8 per kg. Freight cost per unit depends heavily on product weight, volume and the shipping method chosen.
Marine Insurance
Cargo insurance protects against loss or damage during transit. Typically costs 0.3–0.5% of the CIF value (product cost + freight). While optional, it is strongly recommended for shipments over $5,000. CheapBulk can arrange competitive insurance through our carriers.
Canadian Customs Duties
Import duties are calculated based on the product's HS code classification and the declared goods value. Most consumer goods from China attract duties of 0–18%. Some products (textiles, footwear, steel) may have higher duty rates or anti-dumping duties.
GST / HST
Canada charges 5% GST on the total of goods value + duty + freight. In HST provinces (Ontario 13%, Nova Scotia 15%, etc.), HST replaces GST. This tax is payable at the time of customs clearance and is reclaimable for GST-registered businesses.
Customs Brokerage & Handling
A licensed customs broker is required to clear goods into Canada. Brokerage fees range from $50–$200 per shipment. Additional handling fees may apply for terminal charges, container drayage and warehouse receiving.
Last-Mile Delivery
The cost of transporting goods from the Canadian port or airport to your final destination — warehouse, retail location or Amazon FBA centre. Costs vary by distance and shipment size, typically $200–$800 for drayage within the port metro area.
Packaging & Labeling
Custom packaging, bilingual English/French labeling (required in Canada), and FBA-specific prep (FNSKU labels, poly-bagging) add to per-unit costs. Factory-level packaging is cheaper than having it done in Canada.
Example: Landed Cost Breakdown
Here is a realistic example for a consumer product imported from China to Toronto via LCL sea freight (1,000 units, $5.00 FOB price):
| Cost Component | Per Unit | % of Total |
|---|---|---|
| Product cost (FOB) | $5.00 | 58% |
| Sea freight (LCL, per unit) | $0.80 | 9% |
| Marine insurance | $0.03 | <1% |
| Customs duty (8%) | $0.40 | 5% |
| GST (5%) | $0.31 | 4% |
| Customs brokerage (per unit) | $0.10 | 1% |
| Last-mile delivery (per unit) | $0.25 | 3% |
| Packaging & labeling | $0.35 | 4% |
| CheapBulk service fee | $0.50 | 6% |
| Total Landed Cost | $7.74 | 100% |
This is an illustrative example. Actual costs vary by product, volume, shipping method and HS code classification. CheapBulk provides accurate estimates for your specific products.
Canadian Import Duty Rates by Category
| Product Category | Duty Range | Notes |
|---|---|---|
| Electronics & accessories | 0–6% | Many electronics enter duty-free under tariff provisions |
| Textiles & apparel | 12–18% | Higher duties; specific rates depend on fabric composition |
| Footwear | 10–20% | Varies by material (leather vs synthetic) |
| Toys & games | 0–8% | Safety certification required (CPC) |
| Kitchenware & home goods | 0–8% | Material-dependent (plastic, metal, ceramic) |
| Auto parts & accessories | 0–6% | Some parts enter duty-free |
| Packaging materials | 0–5% | Generally low duties |
| Hardware & building materials | 0–8% | Anti-dumping duties may apply to certain steel products |
Hidden Costs Most Importers Miss
Beyond the standard cost components, these expenses can add up and erode your margins if not planned for:
Currency exchange fees — banks typically charge 1.5–3% on USD/CAD conversions
Payment wire transfer fees — $15–$40 per international bank transfer
Demurrage and detention — container late-return fees at port ($100–$300/day)
CBSA examination fees — charged if your shipment is selected for physical inspection
Storage fees — port warehouse charges if goods are not collected within free days
Product compliance testing — lab testing for safety certifications can add $500–$3,000
Returns and defect costs — budget 2–5% for quality issues on initial orders
How to Reduce Your Landed Cost
Negotiate lower FOB prices — a sourcing agent negotiating in Mandarin typically achieves 15–30% savings vs marketplace pricing
Choose the right shipping method — FCL is cheapest per unit for large orders; consolidate LCL to reduce per-CBM costs
Verify HS code classification — incorrect classification can result in overpaying duties by 5–15%
Consolidate orders — shipping multiple products together reduces per-unit freight and handling costs
Order packaging from the factory — bilingual labeling done in China is 3–5x cheaper than relabeling in Canada
Plan ahead — sea freight is 5–10x cheaper per unit than air freight, but requires 4–6 weeks more lead time
Work with a sourcing agent who covers the entire supply chain — eliminating middlemen at each stage
Learn more about shipping from China to Canada or explore our sourcing services.