How to Price a Product for the US: Start With Landed Cost
Key takeaways
To price a product for the US, start from landed cost, not your home price times the exchange rate. In our example, a $5.00 product costs $7.00 in a US warehouse after freight, duty and customs fees (as of October 2026). Your price must clear that cost and still match what US shoppers pay.
Part 1: Why your home price times the exchange rate is not a US price
Brands from Korea and other Asian markets ask us about price early, often before they have chosen a US channel. The questions sound like this:
"We sell this for 29,000 won in Korea. Would $24.99 work in the US?"
"A competitor sells at $19.99. Should we match it?"
The short answer: a US price is not your home price converted into dollars. You build it up from landed cost, then test it against what US shoppers already pay.
Converting your home price is the easiest place to start. But logistics, distribution, selling fees and promotions all work differently in the US, so the cost of selling the same product changes. Every US price has to pass two tests:
- Does the price leave us enough profit?
- Will US shoppers accept the price?
Below, we walk through how to price a product for the US in the order we use with brands, with one example product.
Why not just convert your home price into dollars?
A converted price tells you nothing about US costs or US competitors. Take a product that sells for 29,000 won in Korea. The exchange rate turns 29,000 won into a dollar figure in seconds, but there is no reason that figure should become your US MSRP (manufacturer's suggested retail price).
In the US, the competitors, the distribution chain and the points shoppers compare are all different. Most of all, costs are added between your factory and a US shelf.
Even the way a price is shown can differ. In many US states, sales tax is added at checkout, on top of the shelf price. Iowa's rule, for example, shows a $1 item costing $1.07 at checkout with 6% state and 1% local tax (Iowa Admin. Code r. 701-203.1). Rules differ by state.
A US price is not a converted home price. It is a new price designed for the US market.
What is landed cost, and why is it the first number?
Landed cost is the total cost of a product once it has arrived and is ready to sell. The US International Trade Administration counts product cost, insurance, freight, tariffs and taxes, and other fees in it (ITA). For a brand that imports into its own US stock, the arrival point is the US warehouse.
A product that costs $5.00 at your factory does not cost $5.00 in the US. Here is our example: a 4 to 8 oz beauty product, shipped by sea as one formal entry of 5,000 units ($25,000 of goods). Every line is an example except the MPF and HMF, which are official CBP fees.
| Cost line | Per unit | Source or basis |
|---|---|---|
| Product (factory price) | $5.00 | Example |
| Ocean freight and cargo insurance to a US port | $0.42 | Example. Depends on size, weight, mode and volume |
| Import duty | $0.63 | Example. The rate depends on your HTS code. Since July 24, 2026, a Section 301 action can add duty on products of South Korea (CBP CSMS #69326983). See how to look up your HTS code and rate |
| Customs broker and port charges | $0.12 | Example |
| Merchandise Processing Fee (MPF) | $0.02 | 0.3464% of $25,000 = $86.60 per entry (CBP Dec. 26-14) |
| Harbor Maintenance Fee (HMF) | $0.01 | 0.125% of $25,000 = $31.25 (CBP User Fee Table) |
| Freight from the port to your US warehouse | $0.80 | Example |
| Landed cost | $7.00 | Sum of the lines above |
Three things move these numbers:
- The MPF has a floor and a cap. From October 1, 2026, each formal entry pays at least $34.58 and at most $670.86 (CBP Dec. 26-14). A formal entry worth less than about $9,980 pays the $34.58 minimum, so small first orders pay more MPF per unit.
- Your Incoterm (for example EXW, FOB, CIF or DDP) sets who pays the freight, insurance and customs costs, and so which lines your supplier has already paid (ITA, Know Your Incoterms).
- Size, weight, mode, volume and HTS classification change the real figures. Who files the entry and pays the fees: see Importer of Record and US Customs.
What matters is not your factory price, but what it costs to have the product in the US, ready to sell.
Markup vs margin: what does the $17.99 gap mean?
The $17.99 gap between a $7.00 landed cost and a $24.99 price is your gross profit per unit, before any channel costs. Bottom-up pricing starts here: from cost, how much has to be left?
There are two ways to state the same $17.99, and they are easy to mix up (Starling Bank):
- Markup is profit divided by cost: $17.99 / $7.00 = 257%.
- Margin is profit divided by price: $17.99 / $24.99 = 72.0%.
A 100% markup is only a 50% margin. When a partner quotes "50%", ask whether they mean markup or margin.
A 72.0% margin looks like plenty, but the $24.99 does not all reach you. Fulfillment, selling fees, ads, promotions, shipping and partner margins come out first. On Amazon, the referral fee in beauty is 15% of a price above $10 (Amazon), so the referral fee alone on $24.99 is $3.75, before fulfillment and ads. A distributor and a retailer each take a margin too (broker, distributor or sales rep).
So check the price on the channels you may add later, not only the one you start with. If you plan Amazon or retail in a year or two, build their costs in now.
The question is not how big the gap looks, but how much of it reaches you.
Why keystone pricing falls short for imported products
Keystone pricing doubles the cost to set the retail price, and for an importer it leaves too little room. Shopify describes keystone as a 100% markup and about a 50% gross margin. Shopify also notes that keystone does not include shipping, overhead, duties or fees (Shopify).
The trap is which cost you double. The table measures each price against the $7.00 landed cost.
| Price basis | Price | Left after $7.00 landed cost | Markup on landed cost | Margin |
|---|---|---|---|---|
| Keystone on factory price ($5.00 x 2) | $10.00 | $3.00 | 43% | 30% |
| Keystone on landed cost ($7.00 x 2) | $14.00 | $7.00 | 100% | 50% |
| Example US price | $24.99 | $17.99 | 257% | 72.0% |
Keystone on the factory price ignores freight, duty and fees. Keystone on landed cost is better, but at $14.00 the 15% Amazon referral fee takes $2.10 and leaves $4.90, before fulfillment and ads.
Keystone is a quick check on the floor, not a US price.
Top-down: what will US shoppers pay?
US shoppers pay what comparable products cost, so the market sets the ceiling. Say your math shows you need $39.99 to make enough profit. If shoppers buy similar products mostly at $19.99 to $24.99, a $39.99 price needs a reason they can see.
An average of every price in the category tells you little. Find the products a US shopper will actually put next to yours, and compare more than the price:
- Size
- Key functions and benefits
- Ingredients or materials
- Brand positioning
- Reviews and how shoppers respond
- Sales channel
- Premium or mass
- How often the product is on promotion
Look at the price shoppers really pay, not only the MSRP. For example, a competitor lists an MSRP of $29.99 but mostly sells at $24.99 (about 17% off) or at 20% off, which is $23.99. To the shopper, that competitor is a $24 product, not a $30 one.
Compare the price shoppers actually pay, not the price on the tag.
How to price a product: where the floor and the ceiling meet
The US price has to sit where the cost floor and the market ceiling overlap. As Starling Bank's guide puts it, cost sets the minimum you should charge, and the value buyers see sets the maximum (Starling Bank).
- Bottom-up: landed cost + selling costs + the margin you need = the price your brand can sustain
- Top-down: competitor prices + what shoppers expect + your positioning = the price the market accepts
Now say your math needs at least $29.99, but the market sits around $19.99. Picking $24.99 in the middle does not solve the problem: $24.99 is below your floor and still above what shoppers pay.
Go back to the inputs instead: product cost, packaging, size, positioning and channel.
Sometimes the problem is not the price, but the business model.
Can your US price be higher than your home price?
Yes. Nothing says the two prices must match. The US adds international freight, import costs and US logistics. In some categories it works the other way: US competition is tougher, and you need a lower positioning than at home.
Currency is a third reason. If you pay your factory in won and sell in dollars, exchange-rate moves change your landed cost and margin. Xe lists three responses: accept the spot-rate risk, build a buffer into the price, or cover orders already committed (Xe).
So drop the formula "home price times exchange rate = US price". Set the US price from US shoppers, competitors, costs and channels.
Check these four things before you set the price
Before you lock in an MSRP, you should be able to answer these:
1. What is your real landed cost once the product is in the US?
2. Which products will US shoppers compare with yours, and what do those products really sell for?
3. Where do you want your brand to sit: premium, mass or in between?
4. Will the price still leave a profit when you add Amazon, D2C, a distributor or retail?
Answer these four, and you get a far more realistic price than "the competitor is at $24.99, so we will be too."
Wrap-up
A low price is not automatically competitive in the US, and a high price does not automatically make a brand premium. Your US price has to show shoppers enough value and leave a margin your business can live on.
So when brands ask us how to price a product for the US, the first question is not "What do we charge at home?" It is "At what US price can we compete and still make a profit?"
LinkONE works with brands entering the US to build landed cost and channel margins into one US price before launch.
In the end, your US price sits between the price that sells and the price that leaves a profit.
There is one more problem. Even with a well-chosen $24.99, what you keep depends on where you sell. In part 2, we work out what is left of $24.99 on Amazon, TikTok Shop, Shopify and retail.
Frequently Asked Questions
How do you determine the best price for a product?
Set the price between two limits: your costs set the floor, and the value buyers see sets the ceiling (Starling Bank). Start from landed cost, add your channel costs and the margin you need, then check the result against what comparable products really sell for in the US. If the floor sits above the ceiling, change the product cost, packaging, size, positioning or channel, not only the price.
What is landed cost?
Landed cost is the total cost of a product once it has arrived and is ready to sell, including product cost, freight, insurance, tariffs and taxes, and other fees (ITA). For a US importer, it also includes customs fees such as the MPF: from October 1, 2026, 0.3464% of value per formal entry, with a $34.58 minimum and a $670.86 maximum (CBP Dec. 26-14). In our example, a $5.00 product becomes a $7.00 landed cost.
What is the difference between markup and margin?
Markup is profit divided by cost, and margin is profit divided by price (Starling Bank). For example, a product with a $7.00 landed cost sold at $24.99 has a 257% markup and a 72.0% margin, before channel fees. A 100% markup is only a 50% margin.
What is keystone pricing?
Keystone pricing sets the retail price at double the cost, which is a 100% markup and about a 50% gross margin (Shopify). Shopify notes that keystone does not include shipping, overhead, duties or fees. For an imported product, double the landed cost, not the factory price, and then check the channel fees.
Is US sales tax included in the shelf price?
Usually not: in many US states, sales tax is added at checkout on top of the price shown. Washington law presumes a quoted price excludes sales tax (WAC 458-20-107), and Iowa's rule shows a $1 item costing $1.07 with 6% state and 1% local tax (Iowa Admin. Code r. 701-203.1). Some states let sellers advertise tax-included prices under set conditions, so check the rule in each state.
Sources
- ITA, Determine Total Export Price
- Federal Register, CBP Dec. 26-14: Customs User Fees to Be Adjusted for Inflation in Fiscal Year 2027
- CBP User Fee Table
- CBP CSMS #69326983, Section 301 Forced Labor Import Duties
Fees and rules in this post are as of October 2026.
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