Tariffs and De Minimis: What DTC Brands Should Know

A plain-language look at tariffs, de minimis and DDP for DTC brands. General information only, so check CBP guidance and a customs broker.

If you sell to customers outside the US, or you buy products from overseas, import rules affect your costs and your delivery times. Tariffs and de minimis rules get a lot of attention, and they change. This guide explains the basics in plain words and shows what to ask. It is general information, not legal or customs advice.

A quick note first

We are a fulfillment company, not a customs broker or law firm. Rules, rates and thresholds can change, and they differ by product, country of origin and destination. We do not list specific rates or dates here because they may be out of date by the time you read this. Always check current guidance from U.S. Customs and Border Protection (CBP) and talk to a licensed customs broker before you make decisions.

What a tariff is

A tariff, also called a duty, is a tax a country charges on goods that cross its border. The amount depends on what the product is, where it was made and where it is going. Products are sorted using a classification code, often called an HTS code in the US. Getting the code right matters, because it drives the duty.

For a DTC brand, tariffs show up in two main places:

• Inbound. When you import inventory, for example from a factory overseas, duties may apply when it enters the country.
• Outbound. When you ship to customers in other countries, those countries may charge duties and taxes on the package.

What de minimis means

De minimis is a Latin phrase for "too small to matter." In trade, it describes a value threshold under which a shipment can enter a country with reduced or no duties and simpler paperwork. Many countries have their own thresholds, and the US has had one too.

Here is what matters for a brand: these thresholds have been under review and have changed in different places. Do not build your pricing around an old rule. Before you plan a product, a price or a promotion around de minimis, check the current rule for the exact country and the exact route.

Why this matters for DTC brands

Small, low-value parcels were once an easy way to sell across borders. When thresholds shrink or change, a few things can happen:

• Customers may be asked to pay duties or fees at delivery.
• Packages can be held while paperwork is reviewed.
• Delivery times can get longer.
• Return rates can rise when customers refuse to pay fees on arrival.

None of this means cross-border selling is a bad idea. It means you should plan for it.

DDP and DDU in plain terms

Two terms come up often when you ship abroad.

• DDU (delivered duty unpaid). The customer pays duties and taxes when the package arrives.
• DDP (delivered duty paid). The seller pays duties and taxes up front, so the customer does not see a surprise charge.

DDP usually gives customers a smoother experience and can reduce refused packages. The tradeoff is that you take on the cost, so you need to build it into your pricing. We offer duties-paid options on our international shipping page, and the details depend on the country and the product.

Questions to ask before you ship across borders

Use this list when you talk to your customs broker and your fulfillment provider.

1. What is the correct classification code for each product? A wrong code can cause delays, extra duty or penalties.
2. Where are my products made? Country of origin can change the duty.
3. What are the current rules for each destination country? Thresholds, taxes and paperwork vary.
4. Should I offer DDP, DDU or both? Think about the customer experience and your margins.
5. Who is responsible for filing paperwork? Make sure it is clear whether you, your broker or your provider handles it.
6. What happens to refused or returned packages? Ask about costs and timing.
7. What do I need to show on commercial invoices? Clear, accurate descriptions help packages clear faster.

How to plan your pricing

You do not need to guess. Here is a simple approach.

1. List your top products by sales. Start with the ones that matter most.
2. Confirm each product's classification code with a customs broker.
3. Get current duty and tax information for your top destinations from official sources or your broker.
4. Model your landed cost. Landed cost is the full cost of getting a product to the customer, including product, shipping, duties, taxes and fees.
5. Test your margin under both DDP and DDU.
6. Review on a schedule. Check again every quarter, or sooner when you hear about a rule change.

Inbound imports matter too

If you source products overseas, your import costs affect your margins before a single order ships. Ask your supplier or freight partner what documents they prepare, and ask your broker how duties will be calculated on your inventory. If you source from China, our China sourcing team can explain how factory-direct sourcing works.

Keep your customers informed

Clear communication reduces refusals and support tickets. Put a short note on your shipping page explaining whether duties are included. Show the estimated delivery window and tell customers what to expect. Honest information beats a surprise at the door.

Where to find reliable information

• CBP. Check the official U.S. Customs and Border Protection website for current import rules.
• A licensed customs broker. A broker can confirm classification, duties and paperwork for your products.
• Destination country customs agencies. For outbound shipments, the receiving country's rules apply.

Bottom line

Tariff and de minimis rules are a moving target. Keep your approach simple: know your classification codes, model your landed cost, decide on DDP or DDU, and verify current rules with CBP and a customs broker. If you are planning to ship abroad, read about our international shipping options or contact us to talk through your products and destinations.

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