Why Landed Cost Matters More Than Wholesale Price
Many new jewelry buyers compare suppliers based on one number: the per-stone wholesale price. This is a mistake. The price on the quotation is only the starting point. By the time the stones reach your shelf or your warehouse, you have paid for packaging, international shipping, insurance, customs duty, import VAT, bank fees, and possibly an inspection fee. The real cost can be 20 to 40 percent higher than the quoted factory price.
If you do not calculate landed cost accurately, you will misprice your jewelry and leave margin on the table. Worse, you may discover after your first shipment that your actual cost is 30 percent higher than expected, and your retail pricing is no longer profitable.
This guide walks through every component of landed cost and shows you how to build a simple formula you can reuse for every order.
The Landed Cost Formula
Here is the basic formula:
Landed Cost per Stone = (FCA Price + Packaging + Freight + Insurance + Duty + Taxes + Payment Fees) / Number of Stones
Let us break down each component.
Component 1: FCA Factory Price
FCA (Free Carrier) means the price at the factory door. This is the number your supplier quotes for the stones themselves. It usually excludes packaging, shipping, and export documentation. Make sure you know whether the quote is FCA, EXW (Ex Works), or CIF (Cost Insurance Freight). These are different Incoterms and they change who pays for what.
For moissanite, FCA pricing typically depends on quantity, shape, size, color grade, and whether a GRA certificate is included. Always confirm whether the price is per piece or per dozen, and whether certificates are included or extra.
Component 2: Packaging Cost
Factories often charge for export packaging. Individual stone boxes, foam inserts, labeling, and outer cartons add $0.50 to $2.00 per stone. If you want custom packaging with your brand logo, add $1.00 to $3.00 per stone. For a 100-stone order, this is $50 to $300.
Packaging is not a place to save money. Cheap packaging leads to damaged stones in transit, and damaged stones are 100 percent write-offs.
Component 3: International Freight
Most moissanite shipments from China go via DHL, FedEx, or UPS Express. For a small shipment (under 2kg, roughly 50 to 100 small stones), express shipping costs $40 to $80. For larger shipments (5kg to 20kg), freight costs $100 to $300.
If you are shipping high-value stones, consider registered courier with signature confirmation. The extra $20 to $40 is worth the peace of mind.
Sea freight is rarely cost-justified for loose moissanite because the stones are small and high-value. The speed of express shipping is worth the premium.
Component 4: Insurance
Declare the full value of your shipment on the waybill. Insurance typically costs 0.5 to 1.5 percent of the declared value. If you are shipping $5,000 worth of stones, insurance adds $25 to $75. This is cheap protection against loss or damage in transit.
Never ship high-value moissanite without insurance. Courier compensation limits are low, and you will not be reimbursed for lost stones if you do not declare value.
Component 5: Customs Duty
Import duty depends on your country and the HS code you use for moissanite. In the United States, lab-created gemstones typically enter under HS code 7104.90 with a duty rate of about 5.5 percent. In the European Union, duty rates range from 0 to 4 percent depending on the exact classification. In the United Kingdom, post-Brexit rates vary.
Consult a customs broker or your country's tariff schedule to confirm the correct rate. Under-declaring value to avoid duty is illegal and risks seizure of the entire shipment.
Component 6: Import VAT or GST
Most countries charge import VAT or GST on the combined value of goods plus freight plus duty. In the EU, import VAT is 19 to 27 percent depending on the country. In the UK, it is 20 percent. In Australia, GST is 10 percent. In the US, there is no federal VAT, but some states charge sales tax on imported goods.
If you are a registered business, you can usually recover import VAT on your tax return. But you still need the cash flow to pay it upfront. Factor this into your working capital planning.
Component 7: Payment Processing Fees
Wire transfers cost $25 to $50 per transaction. PayPal charges 4.4 percent plus a fixed fee. Credit card processing through your factory's merchant account adds 3 to 5 percent. For a $5,000 order, payment fees can range from $25 (wire) to $250 (PayPal).
Ask your factory which payment methods they accept and what the associated costs are. Wire transfer is almost always the cheapest for large orders.
Worked Example: 100-Stone Order
Let us run through a realistic example. You are ordering 100 pieces of 6.5mm round D-color moissanite with GRA certificates.
- FCA price: $35 per stone x 100 = $3,500
- Packaging: $1.00 per stone x 100 = $100
- DHL Express shipping: $60
- Insurance (1 percent of $3,500): $35
- US customs duty (5.5 percent of $3,560): $196
- Wire transfer fee: $35
Total landed cost: $3,926. Landed cost per stone: $39.26.
That is 12.2 percent above the FCA price of $35. If you had priced your jewelry based on $35 per stone, you would have underpriced by nearly 13 percent. Over a year of orders, that error destroys your margin.
Using Landed Cost to Set Retail Prices
Once you know your true landed cost, you can set retail prices with confidence. The standard jewelry markup is 2 to 3 times wholesale cost for finished pieces, but this depends on your market and positioning.
If your landed cost per 6.5mm stone is $39.26, and your setting cost is $60, your total piece cost is $99.26. A 2.5x retail price gives you $248. Add $50 for branding and packaging, and your retail price is $298. This is a competitive price for a moissanite solitaire ring while preserving healthy margin.
Hidden Costs to Watch For
Finally, watch for these hidden costs that first-time importers miss:
- Bank intermediary fees: International wires sometimes pass through intermediary banks that deduct $10 to $20.
- Customs brokerage fees: If your shipment goes through a formal entry, a broker may charge $50 to $150.
- Storage fees: If you delay customs clearance, the warehouse charges storage after 3 to 5 days.
- Re-shipping costs: If stones are held at customs and need documentation, you may pay extra fees.
Build a 5 percent contingency into every landed cost calculation. This absorbs surprises without wrecking your pricing model.