The GO/NO-GO decision is simple in concept: does this program make enough margin to be worth doing? The answer depends entirely on what you're measuring margin against. And for most importers, that number is landed cost — which is the wrong starting point for the question being asked.
A GO/NO-GO decision is not a question about the cost of getting product into your warehouse. It's a question about the economics of selling it — the cost of getting it from the factory, through customs, into inventory, through the warehouse, and to a specific customer under specific shipping terms. That's fully loaded cost. And fully loaded cost is materially higher than landed cost on virtually every product in every category.
What GO/NO-GO at Landed Cost Actually Means
When you evaluate a program at landed cost, you are answering a different question than the one you're trying to answer. You're asking: is the margin between my FOB cost (plus freight, duty, and broker) and my selling price acceptable? That question has an answer. It's just not the right question.
The right question is: after paying for everything required to sell this product to this customer — including warehousing, handling, storage, and outbound freight — is there enough margin left to justify the investment of capital, management time, and operational capacity?
The gap between those two questions is the gap between landed cost and fully loaded cost. And when that gap is significant — as it often is — programs that pass the landed cost GO test fail the fully loaded cost GO test. They get approved, they get ordered, they get produced, they get shipped, they get sold, and at the end of the season the margin comes in below expectation. Nobody made a mistake. The model was just measuring the wrong thing.
How Significant Is the Gap in Practice
The gap between landed cost and fully loaded cost varies by product category, by customer, and by how the warehouse costs are structured. But some directional estimates are useful for understanding the scale of the problem.
For a mid-size consumer goods importer using a third-party logistics provider, warehouse inbound and outbound handling typically adds $0.25 to $1.50 per unit depending on the product's size, weight, and the complexity of retailer compliance requirements. Storage cost at typical 3PL rates adds $0.05 to $0.40 per unit per month — which means a product with a four-month average turn accumulates $0.20 to $1.60 in storage cost before it sells. Outbound freight, for an importer paying to ship to retail distribution centers, adds $0.30 to $2.00 per unit depending on the carrier, the zone, and the carton configuration.
Add those ranges together and the fully loaded cost premium over landed cost is $0.50 to $5.00 per unit — before any of them are extreme outliers. On a product with a $4.00 FOB price and a $9.00 retail, that range represents between 5% and 55% of the gross margin at landed cost. The programs that look like 40% gross margin at landed cost may be 25% fully loaded. The programs that look like 20% may be 8%.
An 8% fully loaded margin is not a viable program for most importers. A 40% landed cost margin that produces it might look viable until the books are closed.
The Customer Variable
The GO/NO-GO decision is also customer-specific in a way that landed cost analysis obscures. The same product has a different fully loaded margin for every customer — because outbound freight, shipping terms, and retailer compliance requirements vary by customer.
A product sold to a customer on pickup terms has no outbound freight cost. The same product sold to a distant retailer requiring freight delivery to a distribution center in a high-rate zone has meaningful outbound freight cost. A product sold to a retailer with minimal compliance requirements costs less to fulfill than the same product sold to a retailer requiring specific labeling, case pack configurations, and advance ship notice formats.
Running GO/NO-GO at landed cost treats all customers as equivalent. They're not. A program that is viable for one customer at a given price point may not be viable for another — not because the product is different, but because the cost of selling it to them is different. The only way to see that difference is to run the GO/NO-GO calculation at fully loaded cost, per customer.
The Minimum Viable Margin Question
Every importer has a minimum viable margin — the floor below which a program doesn't justify the capital, the risk, and the operational capacity it consumes. Most importers set that floor as a percentage of landed cost. A 30% landed cost margin. A 25% landed cost margin.
The problem with a landed cost floor is that it doesn't account for what happens between the warehouse and the customer. A program at 30% landed cost margin might be at 18% fully loaded margin — which may or may not clear the actual minimum, depending on the business.
Setting the margin floor at fully loaded cost doesn't require abandoning the use of landed cost as a starting point. It requires extending the calculation one step further — adding warehouse, storage, and outbound freight — before the GO/NO-GO is rendered. That extension takes minutes with the right cost structure in place. And it changes the answer often enough to matter.
Making the Right Decision Before the PO Is Written
The GO/NO-GO decision is most useful — and most actionable — before the purchase order is placed. After the order is written, the product is produced, the shipment has arrived, and the season has closed, the analysis is historical. It explains what happened. It doesn't change it.
Before the PO, a GO/NO-GO at fully loaded cost can change the buy quantity, change the target selling price, change the customer the product is positioned for, or change the decision entirely. All of those adjustments are available before the order is placed. None of them are available after the goods are in the warehouse.
The importers who consistently make better buying decisions are not the ones with better market intuition or better supplier relationships — though those matter. They're the ones who evaluate programs against the right number before they commit. Fully loaded cost is that number. Landed cost is where the calculation starts, not where it ends.
Have you ever approved a program at landed cost that didn't perform at fully loaded cost — and how large was the gap when you finally calculated it? We'd like to hear what the analysis changed about how you evaluate programs going forward.