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Most new sellers price their products by looking at competitors. The Gujarat-based seller, whose business runs 80+ imported products, argues that the calculation should start from landed cost.
Landed cost is the full per-unit cost of getting an imported product ready to sell: the factory price plus freight, customs duty, clearance and delivery to the warehouse. For Ali Lokhandwala, the Gujarat-based Amazon private label seller whose business runs more than 80 imported products, it is the single number that decides whether a product is worth selling, and the one most new sellers calculate last.
Lokhandwala, 27, has sold on Amazon since 2017 and has imported from China since 2021-22. His business generated revenue of about ₹3.5 crore a month in FY 2025-26, according to the company. His argument is simple: price from landed cost upward, not from the competitor’s listing downward.
“Most sellers price from the competitor’s listing,” he said. “We price from landed cost upward. If the numbers only work at a price the market won’t pay, we drop the product before we order it, not after.”
The five cost layers of an imported product
- Factory price: what the manufacturer charges per unit, including customisation and branded packaging.
- International freight and insurance: the cost of moving the goods from China to an Indian port, spread across the order.
- Customs duty and clearance: duties and charges levied on import, which vary by product classification (HS code), plus clearing agent fees. IGST paid at import is generally available as input tax credit to GST-registered importers.
- Inland logistics: transport from port to the seller’s warehouse or Amazon’s fulfilment centre.
- Selling costs: Amazon’s referral, fulfilment and closing fees, advertising, and an allowance for returns and damage.
The first four make up landed cost. The fifth decides what is actually left.
The figures below are illustrative only, for a hypothetical product selling at ₹2,499 including 18% GST. Actual fees, duties and advertising costs vary widely by category and product.
- Selling price: ₹2,499 including GST, or ₹2,118 net of 18% GST
- Landed cost: ₹640, made up of factory price ₹450, freight and insurance ₹50, customs duty and clearance ₹120 (varies by HS code) and inland logistics ₹20
- Selling costs: Amazon fees (referral, fulfilment, closing) ₹450, plus a returns and damage allowance of ₹50
- Margin before advertising: ₹978, or 46%
- Launch phase: advertising of ₹350 per unit leaves ₹628, or 30%
- Steady state: advertising of ₹150 per unit leaves ₹828, or 39%
Two things stand out. First, a product that clears a 40% margin before advertising can fall well below that during launch, when advertising costs per unit are highest. Second, at an order of 500 units, the landed cost alone is ₹3.2 lakh of capital tied up before a single sale. Salaries, rent, samples and unsold stock are not yet included.
Where sellers lose margin without noticing
- Pricing before costing: matching a competitor’s price, then discovering the landed cost does not allow it.
- Ignoring launch advertising: calculating margin on steady-state ad costs that only apply months later.
- Misclassifying the product: an incorrect HS code can mean unexpected duty, delays or penalties at clearance.
- Forgetting returns: categories with higher return rates quietly erode margin.
- Underestimating reorder cash: a product that sells well needs capital for the next order before the first one has paid back.
How his business applies it
In Lokhandwala’s business, every candidate product goes through a landed cost sheet before samples are ordered. His team screens for products that can support a margin of 40% to 60% before advertising, then checks whether the launch-phase figure still leaves room for error. Products that only work at a best-case price are rejected at that stage. Import logistics are coordinated from the company’s Mumbai operations.
“The spreadsheet is boring, and it is the most important document in the business,” he said. “Every expensive mistake I made in my early years would have shown up in it if I had filled it in honestly.”
- Confirm the HS code and applicable duty with a customs broker before ordering.
- Check whether the product needs BIS or other certification.
- Get freight quotes for the actual carton dimensions and weight.
- Model margins at launch-phase advertising costs, not steady-state ones.
- Make sure you have an Importer Exporter Code (IEC) and GST registration in place.
- Keep enough capital for a reorder and at least two to three months of advertising.
Lokhandwala publishes a landed-cost guide on highticketamazon.com, and for sellers considering his mentorship, the company collects reviews from sellers he has trained.
Frequently asked questions
What is landed cost in Amazon selling?
Landed cost is the total per-unit cost of an imported product once it reaches your warehouse: factory price, freight and insurance, customs duty and clearance, and inland transport.
How big is Ali Lokhandwala’s Amazon business?
According to the company, his business runs more than 80 live products and generated revenue of about ₹3.5 crore a month in FY 2025-26. Sellers he has trained have generated more than ₹200 crore in combined revenue.
What margin do private label importers target?
Targets vary. Ali Lokhandwala’s team screens for products that can support 40% to 60% margins before advertising, though margins after launch advertising are typically lower.
(No ET Now Journalists are involved in creation of this article.)
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