Freight and excise add to what a distributor pays; a depletion allowance nets against it. Here is where the three fields live, exactly how each one moves the math, and what the warnings mean.
FOB is what the supplier charges at the dock. Landed cost is what the distributor has actually paid by the time the case is in the warehouse — and it, not FOB, is the number every downstream price is built on. In Alculator, three fields sit between the two: Freight, Excise, and Depletion.
Landed cost = (FOB − Depletion) + Freight + Excise, all per case. Freight and excise add to the distributor's cost; a depletion allowance nets against FOB before anything else happens. All four columns sit in the Supplier → Distributor section of each SKU row in the calculator, and the blue Landed Cost column recalculates as you type.
Landed cost is the total per-case cost to the distributor once the case is on their warehouse floor — FOB net of allowances, plus freight and excise. The industry theory, including duty and insurance for imports, lives in Landed Cost Explained; this tutorial stays on the calculator itself.
Why it matters mechanically: the distributor's margin is applied to landed cost, not FOB. Sell-in is calculated as Landed Cost ÷ (1 − margin%), so a dollar added to landed cost shows up amplified at the shelf. Leave freight or excise at zero and your projected shelf price will be too low — and the error compounds through both tiers.
Every SKU row carries its own set, in the Supplier → Distributor column group, reading left to right:
All three inputs accept zero or more — a negative entry is clamped to $0.00 on the spot. Hover the ? on any column header for a one-line definition. Everything recalculates on change, per case; if you think in per-unit costs, multiply by the units in the case first. The rest of the row is covered in SKU Rows.
Freight is delivery, fuel surcharges, and handling on top of FOB — the getting-it-there money. Excise is federal plus state excise tax per case. Both add dollar-for-dollar to landed cost, so why two fields instead of one? Itemization. Excise is the largest and most-scrutinized cost line for spirits and hemp/THC products, and a distributor reviewing your model will want to see it broken out, not buried in a freight number. The calculator keeps them separate in the row, in the landed-cost math's paper trail, and in every export.
For what actually belongs in each number, see Freight & Logistics and Excise Tax in Beverage Pricing.
Depletion is different in kind: it is not a cost, it is a per-case allowance (a post-off) the supplier gives the distributor. Distributors price off net FOB, so the calculator subtracts the depletion amount from FOB before freight, excise, or margin enter the picture. The supplier still invoices full FOB — the allowance comes out of the supplier's pocket — which is exactly why it nets against FOB instead of appearing as another cost line.
Depletion is the one field most brands should leave at $0.00. Enter a value only when you have actually committed a per-case allowance — a phantom post-off makes every downstream price look better than the deal you are really offering.
One edge case: if depletion exceeds FOB, net FOB floors at $0.00 rather than going negative, and landed cost becomes freight plus excise alone. No warning fires in forward mode — the floor is silent — so if the Landed Cost column looks suspiciously small, check whether your depletion swallowed the FOB.
The loud warning lives in REV mode, where the FOB column flips from an input to a computed value. REV works backwards from your target shelf price through both margins, then subtracts freight and excise to find the FOB you can charge. If those costs are bigger than what is left, the required FOB would be negative — infeasible. The calculator floors the display at $0.00, turns it red, and prefixes a ⚠ symbol; hovering it reads “Target shelf price is too low to cover freight, tax, and margins.”
Three ways to clear the flag: raise the target shelf price, trim a margin (yours to negotiate — see Setting Margins), or cut the freight and excise entries if they were padded. Note that depletion works in reverse here too: because the engine adds the allowance back to find your gross FOB, a post-off raises the FOB you would need to invoice to hit the same shelf price.
A 6×4 case at a 32.5% distributor margin and 28.0% retail margin, three ways:
| Row | FOB | Freight | Excise | Depletion | Landed | Dist. GP | Shelf |
|---|---|---|---|---|---|---|---|
| A | $30.00 | — | — | — | $30.00 | $14.44 | $10.29 |
| B | $28.00 | $1.25 | $0.75 | — | $30.00 | $14.44 | $10.29 |
| C | $30.00 | — | — | $2.00 | $28.00 | $13.48 | $9.60 |
Rows A and B land in exactly the same place: (28.00 − 0) + 1.25 + 0.75 = $30.00, so the engine prices them identically. The math only cares about landed cost — the itemization matters for the conversation with your distributor, not for the arithmetic. Row C shows depletion pulling the other way: a $2.00 allowance nets the same $30.00 FOB down to a $28.00 landed cost, and the whole chain — distributor GP, shelf price — steps down with it.
The same forces run backwards in REV mode. A $12.99 target shelf at those margins requires a $37.88 FOB when all three fields are zero — and every dollar of freight or excise you then add comes straight out of that $37.88.
Open the calculator, add your freight and excise, and see what the shelf actually says.
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