Landed cost: what goes into it
Landed cost is the total of all costs incurred up to the point where a batch is physically ready to ship to the buyer in the destination country. For a trading house it is made up of several components: the purchase from the producer in Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan or Turkmenistan; international freight on the chosen corridor; insurance on each leg of the route; certification and customs procedures; labelling and packing for the sales channel; and warehouse handling at the Uriekstes iela 4A site in Riga.
Each component is tied to primary documents: the contract with the producer, carriers' invoices, the insurance policy, certificates, receipts for labelling and packing, and warehouse handling rates. When a buyer asks for the price structure, we can break it down line by line and show where each euro per kilogram or per pallet comes from. This is what the open model rests on: every component has a name and corresponds to a real operation.
FOB margin versus full margin after delivery
The trading house model works with two different margins. The FOB margin is the difference between the purchase price paid to the producer and the price at shipment on FCA terms (goods handed over to the buyer's carrier) or FOB terms (goods loaded on board the vessel). It covers trading risk, working capital and the trading house's basic commercial work before international carriage begins. The full margin after delivery is the difference between landed cost and the final price to the buyer. It also covers route risks, the cost of corrections and the cost of holding the batch in the warehouse.
Keeping the two margins separate makes for an honest conversation with the buyer. Some category managers ask for a fixed FOB price plus a transparent mark-up for delivery and service. Others prefer a fixed delivered price with the risks shared between the parties. The trading house works with either and says up front which model applies to a given contract.
The service layer: what the price covers besides the goods
The service layer is the reason a buyer in the Baltics or Scandinavia chooses a trading house over direct contracts with separate producers. It includes the pre-export check of each batch against a labelling and documents checklist, import and origin paperwork, support with complaints and returns, onboarding of the product onto the category shelf or a HoReCa menu, and coordination of the seasonal supply calendar.
- Pre-export check of the batch: 01 Capture, 02 Verification of labelling and documents, 03 Report on the checkpoints.
- Import documents: commercial documents, proof of origin, labelling under Regulation (EU) No 1169/2011.
- Complaints and returns: a single point of responsibility and fixed response times.
- Onboarding onto the shelf or menu: specification, photo record, sign-off of the final format.
- Coordination of the seasonal calendar and fallback route options.
Transparency as a pricing tool
An open price structure is a commercial tool. When the buyer can see how much freight, insurance, certification and warehouse handling add to the cost, the negotiation stops being a haggle over a single price and turns into a discussion of which components can be optimised without losing quality. That often brings further savings, for example by moving the supply season into a stable freight window, or by using the pre-export check to keep €200–800 per pallet that would otherwise go on corrections when the goods are released for sale or at the buyer's end.
Transparent does not mean free: every layer has a price. What the buyer gains is the ability to compare offers on real figures, and to see exactly what a trading house adds compared with an ad hoc chain of intermediaries.
Three contract levels: pilot, framework, strategic partner
The trading house pricing model has three contract levels, and the price structure depends on the level. The first level, the pilot, is a small initial batch to validate the product in the category and confirm that the documents comply. The pilot price carries a heavier service layer, because every process is being run for the first time. The second level, the framework contract, covers repeat batches on a fixed seasonal calendar with a set of documents agreed in advance. The framework price is optimised: the service layer is spread over the volume, and the FOB margin is adjusted once supply has proved stable.
- Level 1 (pilot): heavier service layer, fixed volume, fast-tracked document validation.
- Level 2 (framework contract): agreed seasonal calendar, service costs spread over the volume, stable margin.
- Level 3 (strategic partner): joint planning of the SKU portfolio, tailored logistics and certification terms, joint work on developing the category.
- Moving up a level depends on two full cycles running steadily and on proven commercial results.
Protecting the price from customs corrections and seasonal swings
Part of a batch's cost arises after shipment: document corrections at customs, vehicles standing idle during customs holds, repacking in the destination country. Intermediaries rarely include these costs in their published price lists, and they surface after the first deliveries. In the trading house model they are deliberately kept down at the pre-export check: step 01 (Capture), step 02 (Verification) and step 03 (Report) deal with the usual labelling and documentation errors before the pallet leaves the warehouse at Uriekstes iela 4A. The €200–800 per pallet range we quote refers to exactly this difference.
Seasonal swings in freight rates, exchange rates and insurance premiums are handled through price review rules agreed before the contract is signed. For stable seasonal batches we offer a price fixed for 6 months with an adjustment mechanism set out in advance, and for short pilot deliveries a price fixed for a specific shipment. This spares the buyer constant recalculation without turning the contract into a source of hidden risk for the trading house. Clear review rules belong to the transparent model alongside the open breakdown of components.
Transparent pricing is a commercial tool: the buyer sees where each euro comes from, and the negotiation is about the components of the price.