A trading company imported kitchen equipment from three countries and sold it to local retailers. The owner was proud of his margins until a customer ordered a full container. When the container landed, the owner realized the freight and customs charges had eaten an entire year of profit on that one order.
Why the Price Tag Was Wrong
The company priced products using the supplier invoice plus a fixed markup. But that markup never included ocean freight, insurance, customs duties, or the bank fees for the overseas transfer. A product that looked like a 20 percent margin was often a 9 percent margin once the container actually arrived.
ERPNext Consulting helped them restructure how cost was recorded. Every purchase now carries all the extras, freight, insurance, duty, and local transport in one place. The purchase cost shown on the screen is the real landed cost, not just the supplier’s invoice.
What the New Numbers Revealed
- One product line that seemed profitable turned out to lose money on every order due to heavy packaging weight
- Air freight orders were costing three times more than ocean freight, but the selling price was identical
- Two suppliers had consistently higher defect rates, which added hidden rework and replacement costs
The owner made two changes within a month. He stopped air-freighting the heavy items unless a customer paid a faster-delivery premium. And he renegotiated prices with the two expensive suppliers. The combined effect kept more than $40,000 in the business over the following year.
Currency, the Quiet Profit Killer
Trading across currencies means the exchange rate moves between quoting and paying. The old method was to just note the rate on a sticky note and hope. The new approach records a fixed quote rate in the system, so a currency swing becomes visible immediately instead of becoming a surprise at the bank statement.
Every importer should know the true landed cost of each product before promising a price to any customer. ERPNext Consulting did not invent any magic here. It simply forced the company to include every number that already existed.
If you trade across borders, list every cost attached to the next container that arrives, then check what your spreadsheet actually includes. You might be surprised.