Life after de minimis:
the new landed-cost math
for DTC imports.

For about a decade, a lot of DTC brands ran on a quiet subsidy almost nobody put on the P&L. Any parcel under $800 entered the United States duty-free and with almost no paperwork, under the Section 321 de minimis rule. Ship one unit at a time from a factory in Asia, skip the duty, skip the customs entry, and let the customer's order pay for the freight. That math is now dead.

In 2025 the US suspended de minimis for China-origin goods and then removed it broadly for commercial shipments. The European Union is next: its 150-euro duty-free threshold is scheduled to disappear on July 1, 2026, replaced by a flat per-item customs charge. The era of the duty-free small parcel is over in the two largest consumer markets on earth, roughly at the same time.

Here's the part most founders haven't sat down and done yet. This is not a 5% headwind you absorb with a slightly better Meta campaign. For brands built on direct cross-border shipping, it changes the cost of every single order, and it changes it in a way that compounds with your contribution margin rather than sitting politely off to the side. If you import, your landed cost just moved, and the model in your spreadsheet is describing a world that no longer exists.

I've rebuilt landed-cost models through more than one of these shocks while operating brands at WIN. The brands that come out fine are not the ones with the best lobbyists. They're the ones that recalculated the per-unit math honestly, then changed how product physically moves. This post is both halves: the new math, and the structural fix.

The old import math
quietly subsidized a
whole business model.

De minimis was never designed as an ecommerce strategy. It was a customs-convenience rule, a way to avoid the administrative cost of collecting tiny amounts of duty on low-value packages. Then a generation of brands and marketplaces realized that "low-value package, no duty, no entry" described their entire fulfillment model, and built on it.

The model was elegant on a spreadsheet. Hold no domestic inventory. Ship each order individually from an overseas 3PL or directly from the manufacturer. Pay no duty because each parcel sits under the threshold. Carry almost no working capital in stock. For a fast-fashion or low-cost-goods brand, that combination is what made $9 products with free shipping pencil out at all.

What made it fragile is exactly what made it attractive: the whole thing depended on a rule, not on a real cost advantage. The duty wasn't being avoided because the brand had cheaper sourcing or better logistics. It was being avoided because of a paperwork exemption. When the rule changes, there's no operational moat underneath it. The cost was always there. It just wasn't being charged yet.

What actually changed,
on both sides of
the Atlantic.

Two separate changes are hitting at once, and it helps to keep them straight because they break the model in slightly different ways. The US change is a repeal. The EU change is a replacement. Both end the free ride for low-value parcels.

The United States. The $800 de minimis exemption that let shipments enter duty-free was suspended for China-origin goods early in 2025 and then removed for commercial shipments more broadly under executive order. In practice that means the small parcels you used to import with no duty and no formal entry now carry both: the applicable duty for the product's category and country of origin, plus the cost of a customs entry. For a brand shipping individual units from overseas, that's a new line on every order.

The European Union. The EU is removing its 150-euro duty-free threshold. From July 1, 2026, parcels valued under 150 euros face a flat customs charge in the range of 3 euros per item category, applied per tariff heading inside the parcel. A single mixed order with three different product types can attract the fee three times. For a US brand shipping low-value orders into Europe one at a time, a few euros of fixed cost on a sub-30-euro order is not a rounding error. It's the order's entire contribution.

Published duty rates on the high-volume categories most DTC brands live in, apparel, accessories, consumer electronics, now commonly run from roughly 15% to over 30% depending on origin and classification. None of these numbers are exotic. They're the normal cost of importing goods, which is precisely the point. The exception is ending, and what's left is the rule that always applied to everyone shipping in bulk.

Rebuild landed cost
line by line, because
the base moved.

Landed cost is the all-in cost to get one unit to the point where you can sell it: the cost of goods, plus freight, plus duty, plus the cost of clearing customs, plus any handling. Under de minimis, two of those lines were near zero for direct-ship brands. Now they aren't. The fastest way to see the damage is to put the old stack and the new stack side by side on the same unit.

The cost of goods didn't change. The freight barely changed. What changed is that two lines that used to read zero now read real numbers, and one of them, the customs entry, is wildly out of proportion to the size of the order. That single $25 unit nearly doubled in landed cost, and the duty wasn't even the main culprit. The entry fee was.

This is the calculation to run on your own catalog before you touch anything else. Take your three best-selling SKUs, pull the real factory cost, apply the actual duty rate for the classification and origin, and add the genuine per-entry cost your broker charges. Then compare the new landed cost to your selling price. For a lot of low-AOV brands, that comparison is going to be uncomfortable, and it's better to be uncomfortable on a spreadsheet than in a quarter-end review.

The per-entry premium
is what actually
breaks the model.

Most coverage of the de minimis change focuses on duty, and duty matters. But for direct-ship brands, the bigger structural problem is the customs entry, because of how brokers charge for it. Customs brokerage is generally priced per entry, not per item. One container with 10,000 units is a single entry. Ten thousand individual parcels is, in the worst case, something closer to ten thousand entries.

That pricing structure is brutal for exactly the model de minimis enabled. The whole advantage of direct-ship was that you didn't consolidate, you sent each order on its own. Strip away the exemption and that same lack of consolidation becomes the most expensive way to import. You're now paying a fixed administrative cost designed for a freight container, applied to a single t-shirt.

This is why the change is not linear across brands. A premium brand selling a $180 unit can absorb a $6 entry cost as a few points of margin and move on. A volume brand selling a $19 unit at thin margins cannot, because the fixed cost is the same dollar amount on both, but on the $19 unit it's a third of the price. The de minimis repeal is, functionally, a regressive tax on low-AOV, high-frequency, direct-ship businesses. If that's your model, you're the brand it was aimed at.

Forward-stocking is the
structural fix most
brands underuse.

Here's the good news the panic tends to bury: the new rules don't make importing expensive. They make importing one unit at a time expensive. The fix is to stop doing that. Import in bulk, clear customs once, and fulfill domestically. This is forward-stocking, sometimes called in-country enablement, and it flips almost every line that just got worse.

When you bring a full container into a domestic or in-region fulfillment center, you pay duty once, on the wholesale cost of goods rather than the retail value of individual orders. You pay one customs entry, amortized across thousands of units instead of charged on each one. And because the inventory is already in-market, your delivery times drop and your domestic shipping rates apply. Go back to Figure 1: forward-stocking takes that $6+ entry cost and spreads it across the whole container, so the per-unit share rounds back toward zero.

The tradeoff is real, and it's the reason a lot of brands avoided this model in the first place: working capital. Forward-stocking means buying inventory before you've sold it and tying up cash in product sitting in a warehouse. That's a balance-sheet decision, not just an operations one, and it raises the stakes on demand forecasting. Overstock the wrong SKU and you've converted a tariff problem into a markdown problem. This is where disciplined inventory management stops being hygiene and becomes the thing that determines whether the fix works.

It also changes who you need in the building. A direct-ship brand could outsource almost all of this. A forward-stocked brand has to get serious about a domestic 3PL relationship, customs brokerage on bulk entries, and inventory planning. If you've been running lean on operations, this is the change that forces a hire or a partner. The 3PL decision moves from a someday item to a now item.

What a higher landed
cost does to your
whole growth model.

A change in landed cost doesn't stay in the COGS line. It moves through contribution margin, and contribution margin is what funds acquisition. When your per-unit cost goes up, the most you can afford to pay for a new customer goes down, because there's simply less gross profit left on each order to spend. That's the mechanism that quietly strangles a brand that doesn't adjust.

Walk it through. If a higher landed cost takes $5 of contribution out of an order, your maximum allowable CAC drops by something close to that same $5, because the math that sets your acquisition ceiling is built on contribution per order. Keep spending at the old CAC and you've turned profitable orders into unprofitable ones without changing a single thing about your marketing. The ad account looks identical. The unit economics underneath it inverted.

This is why the de minimis change is really a growth-model problem wearing a logistics costume. Brands that only look at it as "duties went up" will try to claw back a few points in negotiation and call it handled. Brands that see it as "contribution per order dropped, so my acquisition ceiling dropped" will adjust the whole engine: pricing, channel mix, and how aggressively they spend to acquire. The first group is solving the symptom. The second is solving the system.

Re-price, re-source,
re-stock: the three
levers in order.

There are only three real responses to a permanent increase in landed cost, and most brands need a blend of all three. What separates the ones that handle it well is sequencing: they reach for the levers in order of speed, while building toward the one that actually fixes the structure.

The de minimis era rewarded brands for holding no inventory and shipping one parcel at a time. The post-de-minimis era rewards the opposite: consolidation, in-market inventory, and the operational maturity to run it. That's not a punishment. It's a return to how durable physical-product businesses have always worked, after a decade in which a paperwork exemption let a lot of brands skip the hard part. The brands that were already building real operations barely flinch. The ones that built on the exemption have a genuine decision to make, and not much time to make it before the EU deadline lands.

If you're staring at a landed-cost model that no longer works and you're not sure whether the answer is price, sourcing, or structure, that's exactly the kind of problem the consumer commerce practice exists to pressure-test. The broader tariff-proofing playbook goes wider than de minimis, and the unit-economics view of tariffs shows how the cost ripples through the rest of the model.

Questions from founders
rebuilding their import
math right now.