Introduction

This article explains how product costs work in TRAEDE. Product costs represent additional expenses that must be added on top of a product’s cost price to calculate the total landed cost. These costs may include customs, shipping, packaging, raw materials purchased by your brand, or any other add-on fees relevant to your product. This guide also covers how to set up product cost types in TRAEDE.

What are product costs?

Product costs are extra costs that are not included in the supplier’s cost price but must be added to determine the total cost of a product. Examples include:

• Customs duties

• Shipping or freight

• Raw materials purchased by your brand

• Extra components (e.g., sunglass cases, garment bags)

These additional costs are used to determine the total cost, which TRAEDE then converts into your accounting currency.
The final value is called the landed cost—this is the value TRAEDE uses when calculating the value of your inventory.

Setting up product cost types

Step 1: Go to the Product Cost Settings

1. Navigate to App Store → Production.

2. Click Product types.

3. Here you will see an overview of existing product cost types.

Step 2: Create a new cost type

1. Click Add new cost type.

2. Enter the name of your cost—for example:

   • Customs

   • Shipping

   • Sunglass case

3. Choose whether the value is entered as a percentage or a fixed amount.

   • Example:

     • Customs → often percentage

     • Packaging → often fixed amount

4. Leave the accounting fields empty for now (these are covered in a separate accounting guide).

5. Click Save all cost types.

Choosing which cost types you need

It is important to think carefully about what costs you want included in your landed cost.

Customs

If you purchase goods from outside the EU, you generally need a customs cost type.
This ensures customs duties are included in your product’s final value.

Shipping

Shipping is more dependent on your supplier setup:

• If shipping is included on the supplier invoice:
  You do not need to add shipping as a product cost.

• If you purchase shipping from a freight company separately:
  You should add shipping as a product cost.
  Otherwise, TRAEDE will under-value your inventory because the freight cost won’t be included.

Shipping and customs are not mandatory, but they are considered best practice for accurate landed cost calculations.