What is Logistics Cost Per Unit?

Logistics Cost per Unit is a critical supply chain metric that translates large macro freight bills into micro product economics. It answers the question: "How much did it cost to physically move this one specific item from the factory to my warehouse?"

Why the Factory Price is a Lie

If you find a supplier on Alibaba selling a t-shirt for $4.00, it is extremely dangerous to price your retail sales based on that $4.00 number. That is just the Cost of Goods Sold (COGS) at the factory door.

If it costs $4,000 to ship a container of 1,000 t-shirts, you are paying $4.00 per unit in freight. Your true Landed Cost is $8.00. Logistics just added a 100% markup to your product before you even started selling it.

The Danger of Low-Value, High-Volume Goods

The "Logistics Markup" metric in this calculator is vital for product selection. Shipping costs are based on volume (cubic meters) and weight, not value.

• High-Value Density (e.g., iPhones): You can fit $1,000,000 worth of iPhones in a small pallet. If freight costs $2,000, the logistics markup is 0.2%. Freight is almost irrelevant.
• Low-Value Density (e.g., Plastic Trash Cans): A container full of plastic trash cans is mostly empty air. The goods might only be worth $10,000, but the container still costs $8,000 to ship. Logistics just added an 80% markup to the product, making it almost impossible to sell profitably.