Cost per Qualified Visit Measured against Gross Margin per Order
Cost per qualified visit must remain below gross margin per order multiplied by qualified session conversion rate to prevent negative unit contribution.
Landed Cost Structure
Meaning
Total price calculations for goods arriving at a final destination include the original purchase price, freight charges, insurance and all applicable taxes or duties. The landed cost structure provides a complete view of the total investment required to get a product into inventory. This figure is used to set retail prices and determine the actual profitability of imported items.
Import Expense
International shipping involves many hidden costs that do not appear on the supplier’s invoice. A landed cost structure accounts for terminal handling fees, customs brokerage and local drayage. When fuel surcharges or port congestion fees rise, they alter the final cost of every unit in the shipment.
Accurate tracking of these variables prevents unexpected margin erosion.
Margin Determination
Retailers use the total landed cost rather than the factory price to calculate their markup. Because the landed cost structure varies by shipment and origin, it can lead to different profit profiles for the same product. Small changes in currency exchange rates or tariff levels can make a previously profitable item unviable.
Price Component
Logistics teams work to minimize the individual elements of the calculation to keep the product competitive. By analyzing the landed cost structure, a company can decide whether to source goods locally or from overseas. This analysis often leads to changes in shipping routes or the use of bonded warehouses to defer tax payments.