Importing goods and dealing with foreign currency

If you import goods to sell — buying from overseas suppliers and bringing them in — you face a challenge that local-only businesses do not. Your real cost is not just the price your supplier quotes. By the time the goods reach your warehouse, that price has been added to by shipping, by duties and taxes, by handling fees, and by the exchange rate between your money and theirs.

The result is that your true cost — often called the "landed cost" — can be quite different from the supplier's price. And if you price your goods based on the supplier's price alone, you may be making far less margin than you think, or even losing money without knowing it.

The good news is that seeing your true landed cost is completely doable, and once you do, you price with confidence and protect your margin. Let us walk through it.

One note first: import duties, taxes, and the rules around them are set by the authorities and change. This article is about how to see and manage your costs, not about specific duty rates or tax rules — for those, check with the customs authority or your forwarder or agent. Do not take specific rates from a blog.

Why your real import cost is hidden

The supplier's price is just the start. Several things add to it before the goods are truly yours, and each is easy to lose track of.

Shipping and freight. Getting the goods here costs money — sea or air freight, and it varies with size, weight, and route. This can be a big addition to the price, and it changes.

Duties and taxes. Bringing goods into the country often means duties and taxes. These depend on what the goods are and the rules that apply, and they add real cost. Getting them wrong — under or over — causes problems.

Handling and clearing fees. There are fees for handling, clearing, and moving the goods through the process. Small individually, but they add up, and they are easy to forget when working out cost.

The exchange rate. This is the tricky one. You pay your supplier in their currency, but you earn in yours. The exchange rate between them decides how much your money you actually spend — and that rate moves. A deal that looked good at one rate can look worse if the rate shifts before you pay. This uncertainty is a real part of importing.

Timing and payment terms. You often pay for imports well before you sell them, and the currency you pay in may move between agreeing the deal and paying. So the timing of your payments matters to your real cost and your cash.

The things an importer needs to see clearly

Keep it simple. A well-run importing business keeps a clear eye on a few things.

1. Your true landed cost

This is the heart of it. For each item you import, you need the real cost by the time it reaches you — the supplier's price, plus shipping, plus duties and taxes, plus fees, at the exchange rate you actually paid. Only when you know this can you price properly and know your real margin.

2. The exchange rate you actually paid

Not the rate on the day you agreed the deal — the rate when you actually paid, and how it affected your cost. Tracking this shows you the real effect of currency on your business, which is often bigger than sellers realise.

3. Your import costs and fees

A clear record of all the shipping, duty, and handling costs against each shipment, so nothing is forgotten in working out landed cost.

4. Payment timing and cash

When you pay overseas suppliers, in what currency, and how that fits your cash. Importing ties up cash early and adds currency uncertainty, so seeing the timing clearly matters.

5. Margin on imported goods

Bringing together the true landed cost and your sell price to see your real margin — so you never sell an imported item for less than it truly cost.

Where AI genuinely helps an importer

Smart tools take a lot of the complexity out of importing.

Working out landed cost. The system brings together the supplier price, shipping, duties, fees, and the exchange rate to show your true landed cost per item — instead of you working it out by hand and forgetting bits.

Reading import documents. Supplier invoices, shipping documents, and customs paperwork can be read by document AI, so the many details are captured without hours of typing.

Tracking the exchange rate effect. Recording the rate you actually paid and showing how currency affected your cost, so you see the real impact.

Watching payment timing and cash. Showing when overseas payments are due and how they fit your cash flow, so the early cash and currency uncertainty do not catch you out.

Showing real margin. Bringing landed cost and sell price together to reveal your true margin on imported goods.

A quick example of hidden landed cost

Imagine an importer who buys a product from overseas. The supplier's price looks great — a healthy margin against the local selling price. So they order plenty, feeling confident.

Then the goods arrive, and the real costs come in. Shipping was more than expected. Duties and taxes added a chunk. Handling fees appeared. And the exchange rate had shifted a little against them between agreeing and paying. Add all these up, and the true landed cost is much higher than the supplier's price. The healthy margin they thought they had is now thin, and on some items, nearly gone.

Now imagine they had worked out the true landed cost before ordering — supplier price plus all the extras at the real exchange rate. They would have seen the real margin up front, priced accordingly, or negotiated harder, or ordered differently. No nasty surprise. That is the difference between pricing on the supplier's number and pricing on your true cost. Seeing landed cost clearly is what keeps importing profitable.

What no system can do about a moving exchange rate

Currency will always carry some uncertainty. The exchange rate moves, and no system removes that. What you can do is see its effect clearly, plan for it, and not be surprised by it. Some importers also use tools to lock in rates — that is worth looking into, but it is a financial decision to discuss with your bank or advisor. Managing the uncertainty is the goal, not removing it.

Follow the import rules properly. Duties, taxes, and customs rules matter, and getting them wrong causes real problems. Use the system to keep costs and documents straight, but follow the proper rules and use a good forwarder or agent. Do not treat the compliance side lightly, and confirm rates and rules with the authorities, not a blog.

Start small. Take your highest-volume imported item and build its landed cost properly — supplier price, freight, duty, fees, the rate you actually paid — before you extend the exercise to currency, cash timing, and margin across the range.

Build one item's landed cost before you build the rest

For most importers, the biggest risk is pricing on the supplier's number instead of the true cost. So start there.

1. Work out your true landed cost for your main imported items — all the extras at the real exchange rate.
2. Price and check margin against that, not the supplier's price.
3. Track the exchange rate effect so you see currency's real impact.
4. Then manage payment timing and cash around the import delay.

One step at a time, importing goes from "hope the margin is there" to "know exactly what it costs and earns."

The same landed-cost discipline decides whether your reported margin is real, because valuing stock at the supplier invoice rather than at landed cost overstates gross margin on every subsequent sale — see cost of goods sold for Shopify stores.

Common questions

What is landed cost, and why does it matter?

Landed cost is the true cost of an imported item by the time it reaches you — the supplier's price plus shipping, duties, taxes, handling fees, at the exchange rate you actually paid. It matters because it is often much higher than the supplier's price. If you price on the supplier's price alone, your real margin may be far thinner than you think.

How does the exchange rate affect my import costs?

You pay your supplier in their currency but earn in yours, so the exchange rate decides how much of your money you actually spend. That rate moves, so a deal that looked good when agreed can cost more if the rate shifts before you pay. Tracking the rate you actually paid shows currency's real effect, which is often bigger than importers expect.

How do I make sure importing stays profitable?

Work out your true landed cost — all the extra costs at the real exchange rate — before you price and order, not after. Then set your prices and check your margin against that true cost, not the supplier's price. This avoids the nasty surprise of thin or vanished margins once all the import costs come in.

Pricing an import when you know the number instead of guessing it

Importing opens up products and margins you could not get locally, but your true cost is hidden behind shipping, duties, fees, and a moving exchange rate.

When you work out your true landed cost and price against it, you know your real margin. You are not surprised by the extra costs, because you counted them. And you make confident decisions about what to import and how to price it — seeing your true costs clearly, and managing the timing and currency around them.

Related: a simple system for your trading company and AI cash flow forecasting for businesses.