What is landed cost, and why does supplier price mislead?
Landed cost is the true cost of a unit on the shelf: supplier price plus freight, duty, clearing, handling and shrinkage. A margin computed on supplier price alone overstates every line, and it overstates the imported lines most, because they carry the most freight and duty. A buyer comparing a domestic label to an imported one on supplier-price margin is comparing two different things.
The commerce engine treats supplier price as the starting input and landed cost as the figure margin is built on. Until a shipment is recorded, the product analyst uses the cost on record and says so; once it is, the figure is the real one.
How a shipment is recorded
A shipment is entered from its documents: the supplier invoice, the freight invoice, the duty and clearing charges, and a CSV listing the lines and units received. The engine allocates the shared costs across the units by the rule the brand chooses, such as by value or by unit, and records a landed cost per variant for that shipment with its landing date.
Nothing is typed twice. The invoices give the totals, the CSV gives the lines, the engine does the arithmetic, and the resulting cost per unit is shown back for review before it is applied, because a decimal in the wrong place on a freight invoice would otherwise ripple into every margin.
- The supplier invoice: unit prices and quantities per line.
- The freight invoice: the shipment's transport cost, allocated by value or by unit.
- Duty and clearing charges: entered from the broker's documents, allocated the same way.
- Handling and shrinkage: the brand's own rule per shipment, stated once and applied consistently.
- The CSV of lines and units received, which ties every charge to the variants that carried it.
Costs are dated so the past stays still
A shipment that landed in March gives March a new unit cost for the units it delivered, and sales from that date use it. February's sales, made from earlier stock, keep their earlier cost. This is how the engine avoids the silent-restatement problem, where adding a cost in May rewrites every report the business has already read.
It also matches how stock actually moves. Units from different shipments carry different costs, and the engine applies the cost that belongs to the sale date rather than a blended average that shifts whenever a new shipment lands.
Why is there one cost table under every margin?
The product analyst, the inventory analyst's cash figures, Foresight's true-profit view, the money-at-stake strip and the Executive Report all read cost from the same dated table. Recording a shipment changes all of them at once and identically. There is no page where the old cost survives to disagree with the new.
That is the first law applied to cost: the backend computes it once, deterministically, from the recorded documents, and every surface shows the same result.
What the landed-cost engine does not do
It does not estimate. If a shipment has not been recorded, the engine does not guess a freight uplift; it uses the cost on record and labels the coverage. It does not change the store's own cost field; the store platform remains read-only. And it does not give tax or customs advice; it records the charges the documents show.
Those boundaries are what make the resulting margin something an accountant will accept, because every figure in it traces to a document.
Who owns it on ftes.ai, and how do you start?
The Landed Cost & Compliance FTE owns the shipment records and the allocation rules; the Controller FTE owns the true-margin figures the records feed. Together they turn the store's supplier-price margin into a fully-loaded contribution margin the owner can act on.
Start with the last three shipments. Recording them dates the cost for most of the stock currently on the shelf, and the product analyst's winners and losers lists change from provisional to real as the coverage note disappears.