When you compare electronics manufacturing quotes, one number always looks tempting: the unit price.
But smart companies know that’s only half the story.
To understand your true cost—and profitability—you need to calculate landed cost. And in today’s world of shifting tariffs, multi-country BOMs, and complex logistics, getting that wrong can blow up your margin.
What Is Landed Cost?
Landed cost is what it really costs to get your product from the factory floor to your distribution center—fully ready to sell.
It’s not just the unit price your supplier quotes. It includes everything in between: international shipping, customs clearance, import duties, taxes, insurance, and all the fees that show up once your goods leave the factory.
Think of it like ordering a batch of custom PCBs. The factory says it’ll cost $5 per unit. Sounds good. But then you find out:
- Shipping adds $1.50
- Import duties tack on 10%
- You need FCC testing in the destination country
- Your freight forwarder charges a handling fee
- And the payment in RMB came with a surprise currency fee
Suddenly, your real cost isn’t $5. It’s closer to $7.20—and that’s before you add your margin.
Freightos breaks it down like this:
Landed Cost = Shipping + Customs + Risk + Overhead
Risk includes insurance and quality control. Overhead includes things like broker fees, documentation, and exchange rate changes.
This is the number that really matters.
It’s the number that tells you if your product makes money—or just looks like it does.
Why the FOB Price Misleads
A supplier quote based on FOB (Free On Board) pricing only tells you the cost of getting goods onto the boat or plane. It doesn’t include what it takes to:
- Ship those goods internationally
- Clear customs
- Pay local duties
- Get certified for sale in your target market
This is especially true in electronics, where components may come from China, assembly might be in Colombia, and testing happens in the U.S.
We’ve seen projects where the lowest unit price ended up 20% more expensive once all landed costs were considered.
What Really Drives Landed Cost? Start With Country of Origin
Once you understand what landed cost includes, the next question is: what makes it jump or drop across borders?
The biggest lever is your product’s declared origin. Tariffs are based not on your brand or where you designed the product, but where the final manufacturing happens. If your device qualifies as “Made in China,” it may face tariffs of 25% or more when entering the U.S. That same product, if assembled in Mexico or Colombia, could enter tariff-free under current trade agreements.
We take this seriously at Titoma. We design products so that final assembly and programming can happen in flexible locations like Taiwan, Colombia, or Mexico. Understanding and managing Country of Origin is often the difference between staying cost-competitive or not.
How USMCA Can Eliminate Tariffs Entirely
If your product is heading to the U.S. or Canada, trade agreements like USMCA can make or break your cost model.
Electronics that qualify under USMCA can enter duty-free, as long as they meet the regional value content or tariff-shift rules. That means parts of the product must come from North America, or the final transformation must take place there. If you get it right, you avoid the 25% tariff altogether.
We’ve helped multiple clients restructure their assembly to meet these rules. When done early in the design process, this is a straightforward way to reduce landed cost without touching the core design.
How Titoma Reduces Landed Cost
At Titoma, we don’t just calculate landed cost—we design for it.
From the start, we select components with tariff exposure in mind. We structure your BOM and assembly flow to support favorable COO declarations. And we provide flexible final assembly options in Taiwan, China, or Colombia, depending on your target market.
We factor in certification, shipping, customs, and even local test lab approvals so you don’t run into surprises later. The result: a product that costs less to import, is easier to certify, and is ready to scale without the tariff shocks.
If you’re still comparing unit prices across suppliers, it’s time to rethink the math. Landed cost is the number that really counts.
