Knowledge Base
Landed Cost
Landed cost is the complete cost of a purchased item once freight, taxes, fees, and delivery charges are added to its quoted price — the only figure that fairly compares two suppliers.
What goes into landed cost
Landed cost starts with the item's price and adds everything required to get it into the maintenance shop: freight or delivery fees, shipping surcharges, taxes, and any handling or small-order fees. For special-order parts it can also include expedite charges. The concept comes from import logistics, but it applies to a fan motor from an online supplier just as it applies to a container of goods — the only price that matters is the price of the part sitting at the property, ready to install.
Why landed cost decides supplier comparisons
Multifamily orders are small, and small orders make freight proportionally heavy. An online supplier's lower unit price can vanish under a shipping charge, while a local supply house's higher counter price includes the technician driving to get it — which has its own cost in hours. Comparing quoted prices without delivery is how operators end up "saving" money that never reaches the P&L. Any supplier price comparison worth acting on compares delivered, all-in prices for the same SKU, and any savings claim should be stated the same way — the standard behind Stilwell's approach to verifying prices.
Common mistake: chasing unit price
The cheapest unit price wins the comparison and loses the quarter when order patterns are ignored. Buying one part at a time from a distant supplier repeats the freight charge on every order; consolidating orders, or sourcing frequently used parts where delivery is free above a threshold, changes which supplier is genuinely cheapest. Landed cost is not a fixed property of a supplier — it depends on how the property buys. The practical rule: price the item as you would actually order it, including the shipping you would actually pay. For freight-sensitive categories like HVAC and appliance parts, this distinction moves real money.
Related terms
Start with one property and one quarter
Send us a quarter of invoices and we will show you what it should have cost. If there is nothing there, we will tell you that too.
