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October 02, 2024
As a business owner, you’ve probably spent countless nights tossing and turning, wondering if your business is truly profitable. You’re constantly selling products, but a nagging doubt lingers—are you actually making money, or are hidden costs eating into your profits? This uncertainty gnaws at you, creating stress and sleepless nights. You know something needs to change, but pinpointing the issue feels like finding a needle in a haystack. One of the key reasons behind this ambiguity could be your landed costs. Many small to medium-sized businesses in retail, wholesale, and manufacturing overlook this crucial aspect, leading to significant financial errors.
Landed costs represent the total cost of getting a product from the supplier to your warehouse. This includes the purchase price, freight, insurance, customs duties, and other charges. Accurately calculating landed costs is essential for determining the true cost of your inventory, which in turn affects your pricing, profit margins, and overall financial health.
Accurate landed cost calculations are vital for several reasons:
Despite their importance, many businesses struggle to manage landed costs effectively. Here are some common challenges:
Failing to manage landed costs accurately can have several adverse effects on your business:
To avoid these pitfalls, it's crucial to manage your landed costs effectively. Here are some strategies:
Consider a business that imports furniture. They initially tracked their landed costs using spreadsheets, leading to frequent errors between their accounting and inventory systems. By switching to an integrated inventory management system, they were able to track all costs accurately. This change resulted in more precise pricing, better profit margins, and improved financial reporting.
At SMB Consultants, we've seen firsthand how critical it is to track landed costs within your inventory management system. This not only provides a true cost of goods but also helps in making informed pricing and purchasing decisions. Many businesses don’t realize the impact until they make the switch and see the benefits for themselves.
Landed costs are a foundational element of accurate financial reporting and informed decision-making. By prioritizing their management, you can enhance your business’s financial stability and ensure long-term success.
Take a step back and evaluate how you're currently managing your landed costs. Are these costs integrated into your inventory management system, or are they handled separately and manually? If you find gaps, it’s time to consider implementing the strategies we've discussed. For more personalized advice or a consultation, reach out to SMB Consultants today. Let's work together to bring clarity and accuracy to your financials.
June 16, 2025
Inaccurate inventory is like an iceberg—what you see above the waterline is just a fraction of the problem. The hidden costs of inventory inaccuracies can silently affect every area of your business, from financial losses to damaged customer relationships. Discover how partnering with SMB Consultants can help you navigate these treacherous waters and transform inventory management from a constant worry into a strategic advantage.
May 08, 2025
Scaling your product-based business doesn’t have to be overwhelming. From inventory management to shipping and fulfillment, we’ll guide you through the must-have tools for growth. Plus, discover how SMB Consultants can help you integrate these tools seamlessly, so your business runs like a dream. Ready to scale smarter? Let’s make it happen!
April 28, 2025
Scaling your business is exciting, but it can also feel overwhelming if your systems and processes aren’t ready to grow with you. From manual processes and disconnected systems to unreliable data, small cracks can turn into major roadblocks. In this blog, we explore 5 reasons your business might not be ready to scale—and how to take the first steps toward smoother, stress-free growth.