The end of the $800 de minimis threshold fundamentally changed cross-border ecommerce in 2025. Every shipment entering the U.S. now requires full documentation, and every unit triggers duty. Many brands quickly shifted their tariff strategy, but one part of the import system remained exactly the same.
Valuation rules did not change.
Customs still relies on a single, longstanding principle: duty is calculated on the price you paid your factory for goods sold for export to the United States.
This number shapes your total duty bill, margin, cash flow, and forecasting accuracy. When valuation is correct, your landed costs stay predictable. When it is wrong, brands face unnecessary duty charges, shipment delays, and potential audits.
This guide breaks down how customs valuation works today and how ecommerce brands can stay accurate as they scale.
The U.S. continues to use transaction value as its primary valuation method. This means customs bases duty on:
The amount you actually paid your manufacturer for the product.
Not your retail price.
Not your Shopify price.
Not the customer’s checkout amount.
U.S. Customs has strict criteria for what counts as a sale. CBP defines a sale as a transfer of ownership in exchange for consideration or payment. This requires actual passage of title and risk of loss to the U.S. buyer. Informal arrangements, consignment, or revenue-sharing don't qualify.
Transaction value offers clarity, consistency, and protects brands from duty calculated on inflated numbers.
Most valuation questions fall into a few clear buckets.
To keep duty low and correct, invoices should clearly separate freight and insurance. If they are blended into the unit cost, customs may include them.
These apply broadly across lightweight products sourced from Asia, whether you sell accessories, home goods, beauty, electronics accessories, or multi-component consumer goods.
Example 1: A standard consumer product
Declared customs value: $6.45
Duty is calculated only on this amount, not the retail price.
Example 2: A multi-component product assembled in Asia
Declared customs value: $4.90
These examples reflect how most lightweight consumer products are valued under U.S. law.
Some brands mistakenly declare the customer-facing price or the Shopify order value. This leads to dramatically higher duties.
Example:
Retail declared: $29.99
Duty at 8%: $2.40
Factory declared: $3.90
Duty at 8%: $0.31
That is a 674% overpayment.
Customs expects your declared value to match your factory cost and documentation. Retail price has no role in valuation and creates financial risk.
With the ability to look up retail prices online in seconds, Customs can easily identify values that seem abnormally low or suspiciously high. Companies caught undervaluing goods may face penalties under the False Claims Act, which can include fines up to three times the duties owed, plus additional penalties of $5,500 to $11,000 per violation. Beyond financial penalties, violations can trigger audits, shipment delays, and reputational damage.
There is a clear line between mitigating duties and evading them. Optimizing country of origin, valuation within the rules, and duty timing is mitigation. Understating your factory price or obscuring true costs is evasion and creates legal risk.
Check for these points before every shipment:
These simple checks prevent nearly all valuation issues.
Customs may increase your declared value if:
If this happens, customs may assign a higher value or request additional documentation. This can lead to delays, penalties, or shipment holds.
Country of origin significantly influences your total duty exposure.
Example:
Factory price: $7.00
China origin:
Vietnam origin:
Same product, same cost, different duty outcome. A basic apparel item from China may incur well over 50 to 70% in total duties when all layers are applied.
This is why many brands are exploring alternative sourcing regions. For a deeper breakdown, see our analysis on China Plus One strategy.
For brands with multi-tier supply chains (factory to trading company to importer), there is an advanced valuation method called First Sale that may reduce dutiable value by using an earlier sale price. The conditions are strict: multiple documented sales, arm’s length pricing, clear U.S. export intent, and complete records.
For most DTC brands that buy directly from factories, standard transaction value is simpler and appropriate.
Learn more: How ecommerce brands can use First Sale.
Correct valuation affects:
Even small errors distort financial models and reduce clarity for operators.
After de minimis ended, brands began paying duty on every shipment. This changed the cash flow equation more than the duty rate itself.
Traditional importing:
Per order importing:
Men’s accessories brand &Collar used this model to go from 5% in stock to 100% during peak season. They achieved 35% year over year revenue growth instead of the projected 30 to 40% decline.
Duty timing is now one of the most important variables in unit economics. For a deeper breakdown of timing vs rates, see Duty Timing vs Duty Rates.
Weekly:
Monthly:
These small reviews keep duty predictable as your volume grows.
Trade policy continues to evolve. Stay current by monitoring:
White House trade actions and USTR Section 301 reviews These resources signal policy direction months before changes take effect.
Federal Register notices and CBP CSMS messages: These publish customs rule updates and operational guidance.
You do not need to overpay duty.
You do not need to guess how valuation works.
Transaction value is simple when documented correctly.
Accurate valuation protects your margins.
Correct timing protects your cash flow.
A streamlined import model protects your operations from delays and risk.
If you want to align duty with actual sales, eliminate duty on unsold units, and modernize your cross border operations, this is the exact fulfillment model Portless operates on.
Learn more about direct fulfillment and speak with the Portless team.
Do I pay duty on shipping?
No, if freight and insurance are separated on the invoice. International freight is excluded from dutiable value when separately stated.
Can I declare retail price?
No. It must reflect your factory price, not your customer price.
What if the invoice is in RMB?
Use the certified Federal Reserve exchange rate for the export date and document which rate you used.
How do I find my product's HTS code?
Use the Harmonized Tariff Schedule search tool. For complex items, consider working with a licensed customs broker.
What if I made a mistake?
Minor issues can often be corrected through a post entry adjustment. Repeated issues may trigger closer inspection or audit. U.S. Customs expects importers to exercise "reasonable care".
