When importing goods or shipping products to customers, there’s more to the cost than just the purchase price. Think freight, customs, insurance, and other hidden expenses this is where Landed Costs come in.
In Odoo Inventory, the Landed Costs feature ensures that these additional charges are accurately factored into your product valuation, helping you maintain true margins and financial clarity.
When you’re importing goods or shipping products to customers whether locally or internationally the sticker price is just the beginning.
You might think,
“I paid 1,00k for this shipment, so that’s my product cost.”
But is it?
Not quite.
What Are Landed Costs?
Landed Cost is the total cost of getting a product from the supplier’s location to your warehouse or customer’s doorstep. It includes:
- Product Purchase Price
- Freight Charges
- Customs Duties & Import Fees
- Clearance & Documentation Charges
- Insurance
- Handling Charges
- Taxes & Other Miscellaneous Fees
- And many Others
In short, it’s the “real cost” of stocking or delivering an item. And if you’re not calculating this in your inventory management software, your product margins might be misleading, and your pricing strategy could be off.
How to Configure Landed Costs in Odoo
To get started:
Enable the Feature
Head over to the Odoo inventory module → Configuration → Settings, scroll down to the Valuation section, and check the box for Landed Costs.
Select a Default Journal where related accounting entries will be posted.
Creating Landed Cost Products
For recurring charges like shipping or customs, your warehouse inventory management setup in Odoo makes this simple :
Go to Odoo Inventory → Products → Create.
Name your product (e.g., “Shipping Charges”).
Set Product Type to Service.
Under the Purchase tab:
- Check Is a Landed Cost
- Choose a Split Method:
- Equal – splits cost equally across items
- By Quantity – splits by item count
- By Current Cost – based on item value
- By Weight / By Volume – based on physical attributes
Processing Purchase Orders & Vendor Bills
Once the Purchase Order (PO) is confirmed and items are received, your inventory control system in Odoo automatically tracks the movement and updates stock values in real time.
- Open the Purchase App
- Create the Purchase Order
Receive the Product, Do the GRN, Next
Now Once, The Material is Received, Click Create Bill from PO Itself
Add the landed cost product (Shipping Charge) as a new invoice line in bottom, as soon as it added, a button of create Landed cost will Enable. Now confirm the bill.
Applying and Validating Landed Costs
After adding landed costs to the vendor bill:
- Click Create Landed Costs
- Select the related transfer (goods receipt)
- Review the Valuation Adjustments
- Click Validate to finalize
A Valuation smart button will appear, letting you view updated stock values.
Reporting & Accounting
As part of Odoo’s odoo warehouse management capabilities, you can View overall valuations via Odoo Inventory → Reporting → Valuation
Journal entries are automatically created and can be viewed under Accounting → Journal Entries
Key Notes:
- Landed costs apply only to Storable Products
- Product categories must use AVCO or FIFO costing methods
- Supports manual or automated inventory valuation
Why Use Landed Costs?
Most businesses using Odoo as their stock management tool track their purchase price and sale price. However, if you’re not tracking landed costs, your cost of goods sold (COGS) might be underestimated.
This leads to:
- Incorrect profit margins
- Poor pricing decisions
- Inaccurate inventory valuation
- Incomplete financial reporting
That’s where Odoo’s inventory tracking solution steps in — helping you assign all indirect costs to the products you’ve received, and giving you a realistic view of your inventory and profitability.
Using landed costs in your inventory management solution ensures:
- Accurate product margins
- Realistic stock valuations
- Proper cost distribution across your inventory
Odoo is not just an inventory management platform — it is a complete business ecosystem. When you enable Landed Costs, you connect your purchasing, warehouse, and accounting teams in one unified flow. Whether you’re a small retailer or a large manufacturer, this warehouse inventory software keeps everyone on the same page and your numbers accurate.
Want to set up Landed Costs in your Odoo system and build a smarter stock control software process? Contact Ahex Technologies
FAQS
Q1. What is Odoo inventory management and how does it handle landed costs?
Odoo inventory management allows businesses to track stock movements, purchase costs, and additional charges like freight and customs — all in one place. The Landed Costs feature ensures every indirect expense is factored into your product valuation accurately.
Q2. What is the Odoo inventory module used for?
The Odoo inventory module is used for tracking stock levels, managing warehouse operations, processing purchase orders, and applying landed costs to get a true picture of your product pricing and margins.
Q3. How does Odoo work as an inventory management software?
As an inventory management software, Odoo automates stock tracking, purchase order processing, valuation adjustments, and accounting entries — giving businesses real-time visibility into their inventory costs and profitability.
Q4. Which costing methods does Odoo support for inventory tracking?
Odoo supports AVCO and FIFO as inventory control system costing methods. Products must be Storable and their category must be configured with one of these valuation methods before landed costs can be applied.
Q5. Can Odoo be used as a warehouse inventory management tool?
Yes. Odoo’s warehouse inventory management capabilities include multi-warehouse support, stock tracking, goods receipt processing, and landed cost distribution — making it a powerful solution for businesses of all sizes.
Q7. How can Ahex Technologies help set up Odoo inventory and landed costs?
Ahex Technologies provides end-to-end Odoo ERP implementationincluding inventory module setup, landed cost configuration, and accounting integration — helping businesses get accurate stock valuations and true product margins. Contact us today to get started.
