A practical landed-cost model includes the product, allocated development and setup costs, origin charges, international transport, insurance where used, customs duty and other applicable tariffs, customs fees, brokerage, bond or filing costs, port or terminal charges, domestic delivery, receiving, inspection, and an agreed allowance for defects or replacements.

The exact customs classification, duty treatment, and government fees must be confirmed for the actual product and import date. US tariff provisions and trade measures can change, and a set containing tiles, racks, dice, cases, printed matter, or other components may require a classification analysis. Use the current Harmonized Tariff Schedule published by the US International Trade Commission and work with a licensed customs broker or qualified trade professional.

This article is a commercial planning guide, not legal, tax, or customs advice.

The Basic Landed-Cost Formula

Use this formula as a starting point:

Total landed cost =
  merchandise cost
  + allocated development and setup
  + origin charges
  + international freight
  + cargo insurance
  + customs duty and additional tariffs
  + customs processing and transport-related fees
  + broker, bond, and filing charges
  + port, terminal, storage, or examination charges
  + final-mile delivery
  + receiving and inbound quality control
  + approved defect/replacement allowance

Then calculate:

Landed cost per saleable set =
  total landed cost / expected saleable sets received

The denominator matters. If you divide by ordered sets but some units are retained for testing, damaged, short-shipped, or not saleable, the result understates the real inventory cost.

1. Merchandise Cost

Start with the approved commercial quantity and product scope. The merchandise line should correspond to the same product specification, tile manifest, accessories, packaging, and trade term used in the supplier's quote.

Include all items purchased for the shipment:

Do not mix an EXW product quote and an FOB product quote in the same comparison without reconciling which origin costs each one includes.

For customs purposes, declared value is a technical compliance matter, not simply an internal landed-cost field. CBP explains that transaction value is generally based on the price paid or payable for merchandise sold for export to the United States, plus certain specified additions. Its current guidance also identifies items such as assists, royalties, selling commissions, packing, or proceeds that may need consideration depending on the facts. Review the official CBP customs valuation guidance with your broker.

2. Development, Sampling, Tooling, and Setup

Custom products often have costs that do not appear in the recurring unit price:

Decide how the business will allocate these costs. A company may expense development immediately or distribute it across an initial quantity for product-margin analysis. Customs treatment can differ from management-accounting treatment, especially for buyer-supplied materials, tools, design work, or other assists. Do not automatically add or exclude these items from customs value without professional review.

3. Origin Charges in China

Origin costs move the finished order from the factory through export handling. Depending on the agreed Incoterm and transport mode, they may include:

Ask the freight forwarder to separate included and excluded origin charges. “FOB included” is incomplete unless the quote names the port and defines the applicable term. For an EXW purchase, the buyer may face more origin items than expected.

4. International Freight

Freight depends on transport mode, chargeable weight or volume, carton dimensions, origin, destination, route, service level, season, and market conditions.

Common options include:

Request freight quotes using the final carton count, dimensions, gross weight, pickup point, and delivery ZIP code. A preliminary estimate based on tile weight alone may omit the space used by cases, trays, protective packaging, pallets, and master cartons.

Freight rates also have validity periods. Keep a planning allowance until the order is packed and a current booking quote is available.

5. Cargo Insurance

Insurance allocation depends on the sales contract and shipping term. Even when a named Incoterm requires a party to arrange a certain level of insurance, the buyer should review whether the coverage amount, risks, exclusions, deductible, route, and claims process fit the shipment.

For landed-cost planning, record:

Insurance does not replace adequate export packaging or documented handover condition.

6. Tariff Classification and Duty

US customs duty begins with classification under the HTSUS. Product name alone is not enough. Classification can depend on material, components, construction, function, packaging as a retail set, and other facts.

Do not assign a Mahjong tariff number from an unrelated supplier's invoice or an online marketplace listing. Instead:

  1. Prepare a complete product description and component breakdown.
  2. Include materials, intended use, photos, packaging, and value details.
  3. Search the current HTSUS and relevant CBP rulings.
  4. Ask a licensed broker or trade professional to review the classification.
  5. Consider a binding ruling request when uncertainty is commercially significant.

CBP states that its Binding Ruling Program can provide prospective classification decisions, while published rulings can be searched through CROSS. CBP also notes that import requirements and duty treatment can depend on the correct HTS number.

For budgeting:

Estimated regular duty = applicable customs value x applicable duty rate

Then determine whether additional duties, trade remedies, exclusions, or other measures apply to the country of origin and product at the time of entry. Do not hard-code one tariff percentage into a long-term product margin model. Store the rate, source, review date, and reviewer for every estimate.

7. Customs and Transport-Related Government Fees

US entries can involve government fees in addition to duty. The type and calculation may depend on entry type, transport mode, value, and current rules. CBP's current overview notes that formal or informal entries can be subject to a Merchandise Processing Fee and that vessel cargo through identified ports can involve a Harbor Maintenance Fee. See the official CBP summary of duties, taxes, and other import fees.

Rates, minimums, maximums, and eligibility can change. Put these fees in separate spreadsheet rows and update them from current official guidance or the broker's entry estimate.

State and local tax treatment is a separate issue. CBP notes that it does not collect state taxes on behalf of states. Ask a qualified tax professional how imported inventory, use tax, sales tax, and marketplace obligations apply to your business.

8. Customs Broker, Bond, and Filing Costs

Commercial imports can create service costs such as:

A broker helps prepare and transact customs business, but the importer of record retains important responsibilities. CBP's tips for new importers emphasize understanding commodity-specific requirements and providing complete product information.

Ask for a broker fee schedule before shipment. A low entry fee may exclude bond, ISF, agency review, duty advancement, or intensive classification work.

9. Port, Terminal, Examination, Storage, and Delay Costs

These costs are less predictable but can materially affect a shipment:

Do not assume they will all occur. Create a separate contingency line based on shipment complexity and experience rather than hiding it in the freight rate.

Good documentation, timely filing, correct importer setup, and coordinated delivery reduce avoidable delays, but they cannot eliminate every examination or terminal event.

10. Final-Mile Delivery

The international freight endpoint may be an airport, port, freight terminal, or bonded warehouse rather than the buyer's final location. Confirm whether the quote includes:

Use the actual receiving ZIP code and facility conditions. A DDP label does not by itself describe unloading, appointment, or fulfillment-center requirements.

11. Receiving, Inspection, and Inventory Preparation

Inventory is not commercially ready merely because it cleared customs. Include destination costs such as:

These activities may be performed by the importer, a third-party logistics provider, or an inspection service. Convert internal labor to a consistent cost if you want an honest SKU margin.

12. Defect, Shortage, and Replacement Allowance

No landed-cost model should quietly assume that every ordered unit becomes saleable inventory. Agree on how to handle shortages, transit damage, nonconforming sets, missing tiles, customer replacements, and retained samples.

Use real historical data when available. For a new product, model a transparent planning allowance and replace it with actual results after receipt. This is not permission to lower the quality standard. It is a financial control that keeps gross margin from being overstated.

A Copyable Landed-Cost Worksheet

Cost line Estimate Actual Basis/source Review date
Finished merchandise Supplier quote/PO
Samples and development allocation Project budget
Tooling/setup allocation Supplier invoice
Origin pickup and handling Forwarder quote
International freight Booking quote
Cargo insurance Policy/forwarder
Customs value used for estimate Broker review
Regular customs duty HTSUS/broker
Additional tariffs or measures Current official source
Customs processing fees CBP/broker
Broker and bond Broker schedule
Filing charges Broker/forwarder
Port/terminal/deconsolidation Forwarder
Examination/storage contingency Planning policy
Final-mile delivery Carrier quote
Receiving and inbound QC 3PL/internal
Repacking or labeling 3PL/internal
Defect/replacement allowance Quality data
Total landed cost
Expected saleable sets
Landed cost per saleable set

Add a second table for carton count, dimensions, gross weight, shipment mode, Incoterm, named place, destination, HTS review reference, origin, entry date, and exchange rate. These inputs explain why one shipment differs from another.

Compare Suppliers at the Same Delivery Point

Suppose Supplier A quotes EXW, Supplier B quotes FOB Shenzhen, and Supplier C quotes delivered duty paid to a US warehouse. Their unit prices represent different cost boundaries.

Normalize each offer to the same receiving point:

Comparable supplier cost =
  quoted scope
  + every excluded cost required to reach the chosen US warehouse

Also compare specification equality. A lower freight-inclusive quote may still use fewer tiles, thinner material, simpler packaging, or fewer accessories. Landed-cost analysis must begin with a normalized factory quote.

Protect Margin With Estimate-to-Actual Review

Create a landed-cost estimate before issuing the purchase order, update it at booking, and close it after final invoices arrive.

Track variance by line:

Use those answers to improve the next quote request, packaging plan, shipment mode, and retail margin.

Frequently Asked Questions

Is landed cost the same as DDP price?

No. A DDP seller quote covers responsibilities defined by the sales agreement and named destination, but the buyer can still have receiving, inspection, storage, fulfillment, defect, tax, or excluded service costs. Verify the exact scope.

What HTS code applies to an American Mahjong set?

The correct classification depends on the actual product, materials, components, packaging, and relevant legal rules. Do not rely on a generic code in an online article. Have the importer or broker review the current HTSUS and relevant CBP guidance.

Are freight and insurance included in US customs value?

CBP valuation rules are specific to the transaction. CBP's public guidance generally distinguishes international freight and insurance from the price paid for the goods while identifying other additions that may apply. Give the commercial invoice, purchase agreement, assists, and payment details to a qualified broker for review.

Should samples be included in landed cost?

Include them in the project's commercial margin analysis using a consistent allocation policy. Their customs value and import treatment should be handled separately under current customs rules rather than assumed to be zero.

When should I calculate landed cost?

Calculate an initial scenario before choosing a supplier, revise it after final packaging dimensions and a current freight quote are available, and reconcile it after receipt.

Plan a US-Bound Custom Mahjong Order

Send Lucky Mahjong your tile specification, packaging direction, quantity, destination, and requested trade term. We can provide the factory-side product and packing data needed by your freight forwarder and customs broker to build a clearer landed-cost estimate.

Discuss a Custom Mahjong Project or email [email protected] with the subject line US Import Planning.