De Minimis Is Gone: The New Cost of Selling Into the US, and How Brands Are Restructuring

For a decade, the cheapest way to sell into the United States was not to be in it. You held stock in the UK, the EU, or with your factory, shipped each order as a parcel, and every package under $800 crossed the border duty free. No customs bond. No brokerage. No US warehouse. That exemption built the international side of the DTC industry.

It is gone. And if your brand still ships parcels into the US the way it did in 2024, you are now paying for a model that no longer exists.

This is what changed, what it actually costs, and the restructuring playbook we are seeing work.

What actually changed

The numbers behind the old model were enormous. De minimis parcels entering the US grew from 134 million in 2015 to 1.36 billion in fiscal 2024, more than 4 million packages a day, with an estimated value of around $64.6 billion (US Customs and Border Protection).

Then it ended in stages. The exemption was suspended for China and Hong Kong in May 2025, extended to all countries in August 2025, and confirmed as continuing policy in February 2026. The effect was immediate and visible: global postal traffic to the US fell 81 per cent in the week after the all-country suspension took effect, and 88 of 192 Universal Postal Union member countries suspended some or all US-bound postal services while they worked out how to collect duties (UPU, 2025). CBP has since collected more than $1 billion in duties on over 246 million formerly exempt shipments (CBP, 2026).

This is not a US-only story. The EU scrapped its own €150 low-value exemption on 1 July 2026, and the UK confirmed in the Autumn Budget 2025 that it will abolish its £135 threshold, with reforms due by 2029. The direction of travel is the same everywhere: the duty-free parcel is dead as a business model.

If you want the background on the separate question of refunds from the struck-down 2025 tariffs, we covered that in Tariff Refunds in 2026. This article is about the structural change that is still in force.

What a parcel into the US costs now

Under the old model, a $60 order shipped from Europe to a customer in Texas attracted no duty and no formal entry. Under the new one, every parcel is a customs entry. That means duty on the retail value of the order, plus a brokerage or processing fee that typically runs between $25 and $75 per entry depending on carrier and channel.

Run that against a $60 order and the model collapses on contact. Even at a modest duty rate, you are handing over a meaningful slice of the order value in duty, then paying a fixed fee that can exceed your entire contribution margin on the parcel. The Yale Budget Lab put the average effective US tariff rate at 17.4 per cent in September 2025, the highest since 1935. Researchers at the NBER estimated the end of de minimis alone would cost US consumers at least $10.9 billion, around $136 per family (Fajgelbaum and Khandelwal, 2025). Somebody pays that. Either you absorb it and your margin goes, or your customer pays it at the door and your conversion and refund rates go instead.

There is a second, quieter cost. Surprise duty collected on delivery is the worst checkout experience in ecommerce. Brands running the old model into 2026 report exactly what you would expect: abandoned deliveries, chargebacks, and one-star reviews that have nothing to do with the product.

The structural fix: import in bulk, hold stock in the US

Here is the mechanic that changes everything, and it is the reason restructuring is not just damage limitation but often a margin improvement.

When you ship a parcel direct to a consumer, duty is assessed on the retail value, the $60 the customer paid. When you import in bulk to your own US stock, duty is assessed on the commercial value of the goods, broadly what you paid for them. For a brand running a typical DTC margin structure, that difference alone can cut the duty bill per unit by more than half, before you count the brokerage saving of one entry per container instead of one per order.

The comparison looks like this for an illustrative $60 retail item with a $18 landed product cost, at a 15 per cent duty rate:

The figures in the table are illustrative, but the structure is not. Duty on wholesale value instead of retail value, one customs entry instead of thousands, and domestic delivery speeds are the three reasons nearly every brand we speak to lands on the same answer: hold stock in the United States.

The restructuring playbook

The move from direct-ship to US-stocked is a defined project, not a mystery. We have built this exact stack ourselves, from the UK, so what follows is the sequence as it actually runs rather than as a theory.

First, the legal and financial rails. You form a US entity, typically an LLC, obtain an EIN from the IRS, and open a US business bank account. A foreign entity can import without a US company by using a customs-assigned importer number, but if you are serious about the market, the entity makes everything downstream simpler: banking, sales tax registration, 3PL contracts, and eventually hiring.

Second, the customs infrastructure. A continuous customs bond is the standing requirement for regular importing. The minimum bond has a $50,000 face value and typically costs a few hundred dollars a year in premium, though your required bond size scales with your duty bill, so model it against your actual import volumes. You will also want your product properly classified. HTS codes decide your duty rate, and misclassification cuts both ways: some brands are overpaying on codes chosen casually years ago, others are sitting on underpayment risk that surfaces in an audit.

Third, the physical operation. You select a US 3PL, negotiate the fulfilment agreement, and build the inbound plan: which SKUs, what depth of stock, on what replenishment cadence. This is where most of the long-term economics are decided. Our guide on how to choose a 3PL covers the selection process in full, and the freight decision that feeds it, sea versus air, deserves its own maths, which we set out in Air vs Sea Freight Cost in 2026.

Fourth, the planning layer. Holding US stock means forecasting US demand, and this is where direct-ship brands feel the culture shock. You can no longer make every unit available to every customer everywhere. You have to decide, in advance, how much of each SKU lives in America. Get it wrong one way and you are air freighting emergency top-ups at panic rates. Get it wrong the other way and your cash is asleep on a shelf in South Carolina. The disciplines that fix this are the same ones we write about constantly: weeks of cover targets, replenishment triggers, and honest forecast accuracy tracking.

Where brands get it wrong

Three failure patterns come up repeatedly.

The first is treating this as a shipping problem and handing it to the carrier. Carriers will happily sell you delivered-duty-paid parcel services that keep the old model on life support. The duty is still assessed on retail value. You have made the pain invisible to the customer and moved it entirely onto your margin, permanently.

The second is moving stock to the US without re-planning the buy. If your first bulk shipment is simply three months of everything, you have converted a duty problem into an inventory problem. The US range should launch narrower than your home range, weighted to proven sellers, and widen as the data comes in.

The third is timing. Sea freight from Asia runs roughly ten weeks door to door once production is included, and Q4 is when the whole industry ships. A brand deciding in October to hold US stock for peak has already missed it. The restructuring window for this Christmas is now, which is precisely why we are writing this in August.

What this means if you sell into the US from the UK or Europe

The blunt version: your US revenue is now a supply chain question, not a marketing one. The brands winning the transition are treating it as a scoped project with a deadline, entity, bond, classification, 3PL, first bulk shipment, rather than a series of reactive patches. The ones losing it are still paying per-parcel duty on retail values and wondering why the contribution margin on US orders went negative.

The economics mostly favour the move. Duty assessed on commercial value rather than retail value, one entry per container rather than per order, faster domestic delivery, and no doorstep duty surprise usually add up to a better US P&L than the old model ever offered, even before the exemption died. The cost is upfront: capital tied up in stock, and a planning discipline you may not have needed before.

If you want to know what the numbers look like for your brand specifically, that is exactly what our fixed-fee supply chain and operations audit quantifies: your landed costs under both models, the classification position, the 3PL economics, and a sequenced plan. Details are on our pricing page. And if you are scaling past the point where the founder can run this alongside everything else, that is a different conversation, and we wrote about it too.

The parcel loophole built a decade of easy international DTC. It is not coming back. The brands that restructure deliberately this year will spend the next one competing against everyone who did not.

Sources named inline: US Customs and Border Protection (de minimis volumes, duty collections); Universal Postal Union (postal suspensions, 2025); Yale Budget Lab (effective tariff rate, September 2025); Fajgelbaum and Khandelwal, NBER (consumer cost estimate, 2025); UK Autumn Budget 2025; EU customs reform (July 2026).