Two ecommerce brands sell the same products and pay the same duty rates. One grows profitably with strong cash flow. The other struggles with capital constraints and inconsistent international conversions.
The difference is not what they pay in duties. It is when they pay them.
Most brands obsess over duty rates. They spend months reviewing HS codes, chasing preferential tariffs, and looking for classification changes that might save a few points. Meanwhile, they ignore a far bigger driver of cost and growth.
Duty timing, not duty rates, is the lever that determines cash flow, sell-through speed, and working capital availability.
In cross-border ecommerce, timing often matters more than rate. Yet almost no one talks about it.
Duty rates are the percentages governments charge on imported goods. They are based on Harmonized System codes, country of origin, material composition, and trade agreements.
Tariffs are not the same as duty rates. Tariffs are temporary surcharges created by trade actions like Section 301. Both apply on top of each other and both increase cost.
There are advanced strategies that reduce landed cost. First Sale methodology, multi-tier valuation, and precise product classification can create savings. But these strategies require legal review, operational stability, and meaningful volume. They typically deliver small, incremental improvements.
For most DTC brands, optimizing duty rates alone does not materially change the business.
Duty timing refers to when duties are paid relative to production and sales.
And when it comes to ecommerce, there are only two models that matter:
This is the comparison most operators are missing.
In the traditional model:
This model forces brands to prepay significant duty and tax outlays long before revenue arrives.
The Portless model reverses the cash-flow burden:
This is tax deferment in action: duty payment finally aligns with revenue.
This shift alone can transform a brand’s liquidity, operating rhythm, and ability to scale.
Traditional import models require duties to be paid long before a unit sells. A $100,000 shipment at a 25% duty rate means wiring $25,000 months before selling a single unit.
That money sits idle as inventory moves from factory to warehouse to carrier to customer.
Under the Portless model, duties are paid per order, not per container. Inventory stays overseas. Cash returns in days, not months.
Traditional importing slows operations because capital is trapped in freight, customs, and warehouses.
The Portless model allows brands to:
Duty timing will outperform rate optimization when:
Rate optimization makes sense when:
Most sophisticated operators eventually optimize both timing and rates. But timing delivers faster and more universal gains for most DTC brands.
Improving duty timing starts with a clear audit.
Why this matters: It reveals how much revenue your current duty model is losing before you even ship a unit.
Document:
Why this matters: If duties are paid more than 30 days ahead of sales, timing is hurting your working capital.
Why this matters: Customers will tell you exactly where the duty process creates friction.
Why this matters: It shows how aligning duty payment with revenue unlocks cash flow and reduces inventory risk.
The impact of duty timing becomes real when brands shift from bulk prepayment to per-order duty payment. Once duties align with revenue instead of production, three things happen immediately:
This is exactly what happened with Foreign Resource, a premium streetwear brand that cut their manufacturing-to-shipping timeline from 21+ days to 2 days after switching to Portless.
Founder Matias Belete put it simply:
“I can almost achieve a negative cash conversion cycle. I can get paid before I’m paying for shipping, and sometimes, with good factory terms, even before that.”
By storing inventory overseas and paying duties only when orders are placed, Foreign Resource turned production into liquidity and freed the founder to focus on product and marketing rather than ops firefighting.
Foreign Resource founder
Matias Belete
&Collar saw the same pattern. After removing upfront duty payments and shifting inventory overseas, they moved from 5% in stock to nearly 100%, recovering a peak season that would have otherwise been lost and driving a 35% year-over-year lift during Father’s Day.
&Collar's founder and cofounder:
Ben Perkins and Jordan Larsen
Research from Hurricane Commerce shows that accurate landed-cost transparency increases repeat purchases, reduces support tickets, and improves delivery reliability.
Learn how you can calculate your landed cost.
Duty timing is not just a finance fix. It is an operational unlock across the entire customer and inventory lifecycle.
Ecommerce has entered a new era. With tariff volatility and rising cross-border complexity, brands can no longer afford to ignore duty timing.
Paying duties upfront drains capital. Paying duties only when a unit sells frees capital to grow. Duty timing is the missing lever in most brands’ unit economics.
Most brands focus on shaving a few points off duty rates while losing far more to cart abandonment, tied-up capital, and poor customer experience.
Do not be most brands. Run the timing audit. Quantify the real cost. Move to a model that protects both margin and cash flow.
The brands winning in global ecommerce are not paying lower duty rates. They are paying at the right moment.
Ready to fix your duty timing strategy?
Talk to our team and see how Portless optimizes timing for speed, margin, and cash flow.
