The supplier invoice is not the final cost of imported inventory. A product can look profitable at purchase price and become much less attractive after freight, insurance, destination charges, import taxes and local handling are added.
Landed cost brings those expenses together so an ecommerce business can understand what inventory actually costs when it reaches the point where it can be sold.
This is an operational costing guide, not tax or customs advice. Confirm the treatment of your goods and GST position with Singapore Customs, IRAS or a qualified adviser.
Start with the purchase value
Record the commercial value of the goods and the Incoterm used with the supplier. The Incoterm matters because some freight, insurance or origin costs may already be included in the supplier's price while others sit outside it.
A landed-cost model should avoid both omissions and double-counting.
Add international freight and insurance
Include the cost of transporting the goods to Singapore and the applicable insurance. For customs valuation, Singapore generally uses a cost, insurance and freight basis for imported goods under the transaction-value method, subject to the customs valuation rules.
Keep freight allocations traceable when one shipment contains many SKUs.
Determine whether customs duty applies
Singapore Customs identifies intoxicating liquors, tobacco products, motor vehicles and petroleum products as the main categories of dutiable goods. Many other imports are non-dutiable but still subject to GST.
If your goods are dutiable, use the applicable classification and duty rules rather than applying an assumed percentage.
Calculate import GST using the current rate
Singapore's prevailing GST rate is 9%. For a normal import, GST is calculated on the applicable customs value plus duty and other amounts required by the customs rules.
For a simplified non-dutiable example, if goods have a CIF customs value of S$11,000 and no duty applies, 9% import GST would be S$990. That example illustrates the arithmetic only; the final customs value and tax treatment depend on the actual shipment.
Add customs, permit and destination handling costs
The shipment can also incur declaring-agent fees, permit-related charges, terminal or handling fees, documentation charges and other destination services depending on the mode and provider.
Do not hide these inside a broad “freight” number if the business wants to compare lanes or providers later.
Add local delivery and warehouse inbound costs
Include the cost of moving cleared cargo from the port, airport or freight facility to the warehouse. If the warehouse charges for receiving, pallet handling, special inspection, relabelling or other inbound work, include those costs where they are attributable to the imported inventory.
A simple landed-cost formula
For management accounting, some businesses may treat recoverable GST differently from a non-recoverable inventory cost. That is an accounting and tax question for the business and its adviser, not something to assume from a logistics calculation.
Allocate shared shipment costs consistently
A mixed shipment needs a rule for spreading freight and handling across SKUs. Common allocation bases include units, value, actual weight, volumetric weight or occupied volume.
No one basis is perfect for every shipment. Choose the method that best reflects the cost driver and use it consistently enough that product margins can be compared over time.
Watch for bulky low-value products
A low-cost product can absorb a disproportionate share of freight when it occupies a large amount of space. Allocating freight only by product value can make those items look more profitable than they really are.
Compare value-based allocation with weight or volume where shipment density differs significantly between SKUs.
Include landed cost in replenishment decisions
A faster freight mode can increase transport cost while reducing stockout exposure. A larger sea shipment can reduce freight cost per unit while increasing inventory on hand.
That is why landed cost should be used alongside inventory and service-level decisions, not as an isolated finance exercise. See Air Freight vs Sea Freight for Ecommerce Inventory.
Reconcile estimated and actual landed cost
Before shipment, build an estimate using supplier and freight quotes. After arrival, replace estimates with actual freight invoices, customs values, GST or duty, local charges and warehouse costs.
The difference is useful. Repeated variance can expose underestimated destination fees, inefficient shipment sizes or supplier terms that need to be renegotiated.
Connect costing to the freight workflow
Stashworks supports international cargo through its freight forwarding service and can connect incoming goods to warehousing and fulfilment. For any landed-cost model, confirm the exact service scope and charges for the actual shipment rather than relying on a generic estimate.
Sources: Singapore Customs, Customs Valuation; Singapore Customs, GST; IRAS, GST on Imported Goods.
