Need a de minimis strategy? Here are 4 questions every shipper should ask.

If you’re an e-commerce retailer looking to save on cost, the de minimis exception could be right for you.

The niche customs provision is an increasingly popular tool in retailers’ fulfillment playbook, despite recent changes to enforcement and concerns about its future. If used correctly, companies can leverage de minimis to ship goods from foreign countries directly to consumers, while saving time and costs, experts told Supply Chain Dive. 

However, the strategy is not a good fit for every e-commerce retailer: An effective de minimis strategy depends highly on a company’s product type and supply chain set-up, and may take significant customs expertise to assess. So how do you know if your supply chain is properly set up?

Here are some of the top questions logistics consultants and executives said they consider when helping shippers evaluate whether de minimis is the right fit for their supply chain.

1. What is your average order size?

Companies that ship goods directly to consumers are the best fit for this strategy, in part due to their typical order size.

“De minimis shipments are more common in the parcel and e-commerce industries,” Miguel Perez, senior director of cross-border operations and solutions at TA Services, a freight brokerage, said in an email.

The customs provision limits duty-free shipments to an $800 limit per person, per day. While that is a sizable limit for many e-commerce goods — consider how many T-shirts, water bottles, or beauty products a single person could buy for $800 — firms with high-value products may find the provision less useful.

As an example, ShipBob uses the provision to fulfill its merchants’ direct-to-consumer shipments from places like Tijuana, Mexico. A ShipBob spokesperson told Supply Chain Dive its clients use the provision to ship orders valued between $60 and $100, on average — far below the upper limit. 

By contrast, companies like Ford may not benefit as much from a de minimis exception, due to the average size of their orders, Linda Bravo, a U.S. customs broker at Sunset Transportation, told Supply Chain Dive.

“Ford is an importer of record, and they’re going to buy a huge amount. It’s commercial,” said Bravo. “They’re not going to buy for a person, right? They’re going to buy for their plant, or they’re going to buy goods to send to their plant in Detroit. So they’re huge shipments going for assembly.”

2. How is your product classified by customs?

The type of product being imported into the United States also matters, as not every e-commerce shipment may qualify for optimal savings under de minimis provisions.

“So the first thing is classification,” said Maggie Barnett, CEO at LVK Logistics, a 3PL specializing in de minimis fulfillment. “This can get really difficult.”