Landed cost and tax
Your FOB price is not what your buyer pays.
Import duty, IPI, PIS/COFINS, ICMS, freight, insurance, port fees and customs brokerage all stack on top of your quotation. 8 cost lines, and one of them changes by Brazilian state and by the buyer's tax regime. We model the real delivered cost before the negotiation, so both sides agree on a number that exists.
No cost, no commitment. A 20-minute call to scope the product and the destination.
The silent deal-killer
Why does a buyer stop replying after receiving a quotation?
Because they took it back to their finance team and could not answer the only question that mattered: what does this actually cost me, delivered, after tax. They know the FOB price is the beginning of the number, not the number. They also know that getting it wrong means selling at a loss for a year.\n\nSo they stall. Not because your price is high, but because they cannot model the final figure and are not willing to commit to a landed cost they cannot see. From your side it looks identical to losing on price, which is why so many suppliers respond by discounting a deal that was never about the discount.
What goes into the number
Eight lines, and one of them is a state-level decision.
- Import duty (II)Set by NCM classification. Two similar products can fall under different codes with materially different rates, which is why classification is done before the model, not after.
- IPIFederal excise, also by NCM, and creditable depending on the importer's tax regime.
- PIS and COFINSFederal contributions on import. Whether they are recoverable depends on whether the buyer is on Lucro Real, Lucro Presumido or Simples Nacional.
- ICMSA state tax. The same container costs a different amount depending on which Brazilian state it clears into and where it is sold. This is the line most foreign quotations ignore entirely.
- Freight and insuranceFCL or LCL changes the per-unit economics sharply at low volume, and both enter the customs value.
- Port and terminalTerminal handling, storage, and demurrage if free time is exceeded. Free time is negotiable, and usually is not negotiated.
- Customs brokerageBroker fee plus the Siscomex utilisation fee.
- FXThe exchange contract and its spread. On a large order, the spread alone can exceed the margin being argued over in the negotiation.
The part that surprises people
The same product has different costs for two different buyers.
Brazilian tax is not a single rate applied to everyone. Whether a company can recover PIS, COFINS and ICMS as credits depends on its tax regime, and the regimes behave very differently. A buyer on Lucro Real recovers most of it. A buyer on Simples Nacional recovers almost none, which means the same landed cost lands very differently on the two income statements.\n\nThat is why a landed cost model is built for a specific buyer in a specific state, not for a product in the abstract. A number that is right for a distributor in São Paulo can be wrong by a wide margin for one in Santa Catarina.
How it works
Three steps, and the first one costs nothing.
- 1
Tell us the product and the buyer
Technical description, FOB price, volume, destination state. Twenty minutes on a call is enough to scope it.
- 2
We classify and model
NCM classification first, because every rate depends on it. Then the full cost build-up for that specific buyer, state and tax regime.
- 3
You negotiate against a real number
Both sides see the same figure. The conversation moves from a price nobody can evaluate to a margin both sides can.
How much more than FOB should we expect?
There is no useful general answer, and any supplier who gives you one is guessing. The multiplier depends on the NCM code, the destination state, the buyer's tax regime and whether the product needs certification. It is precisely because the range is so wide that the model has to be built for the specific case.
Why does the Brazilian state matter?
Because ICMS is a state tax, with rates and benefit regimes that vary between states. Where the cargo clears customs and where it is subsequently sold both affect the final cost. Choosing the port is therefore partly a tax decision, not only a logistics one.
Can we model this ourselves?
The arithmetic is not the hard part. The hard part is the NCM classification, which sets every rate, and knowing which taxes the specific buyer can actually recover. Both require reading Brazilian tax rules against the specific product and the specific company.
Do you provide this before we have a signed deal?
Landed cost analysis is a contracted service, not a sales document, because building it properly means classifying the product and reading the buyer's tax situation. What costs nothing is the first call, where we scope what the analysis would involve and whether it is worth doing at all.
Related
Next step
Tell us the product and where it is going.
Twenty minutes is enough to scope what the analysis involves and whether the deal is worth modelling.
No cost, no commitment. Twenty minutes.