- Search
- 1.877.235.1004
- Contact Us
- Design 1st
- Resources
- Strategies to Minimize Tariffs
Small Shipment Strategy Guide to Minimize Tariff USA Impact
Dave Ingram
Estimated Reading Time:
Table Of Contents
You’ve got 500 finished products sitting in a warehouse overseas. Six months ago, importing them would cost a manageable amount in tariffs. Today? The tariff burden has increased significantly. Other companies are somehow still selling at competitive prices.
Here’s what they figured out. Instead of importing in bulk, they’re shipping directly to customers one package at a time. Same products, almost zero tariffs.
How the Under-$800 Rule Works
The US has a “de minimis” rule for shipments valued under $800. These packages don’t require formal customs processing, tariff calculations, or duty payments. They clear customs like regular mail deliveries.
This rule was designed for personal purchases and small business transactions. Companies are now using it for direct-to-consumer fulfillment to avoid bulk import tariffs.
Ship inventory in bulk and pay tariffs on the full shipment value. Ship the same products individually under $800 per package and pay zero tariffs.
When Shipping Finished Goods Made in China Individually Makes Sense
We’ve seen companies evaluate this approach over the past year. The ones who succeed share the following common characteristics.
Products hit the right price point
Products priced between $30 and $400 work best. Too cheap, and the shipping costs eat the savings. Too expensive, and you bump into the $800 limit too quickly. We’ve seen this work for consumer electronics, small appliances, and specialty tools.
Customers are patient, trading off time and cost
Direct shipping from China means 7-14 day delivery times instead of next-day fulfillment. Some customers accept this trade-off for better pricing. Others expect instant gratification and will shop elsewhere. With tariffs the trade-off balance is shifting to waiting, to save significantly on the cost.
Volumes are manageable to sell directly to consumers from a China shipping point
Managing individual fulfillment for a few hundred customers is straightforward. Managing thousands of units per SKU and multiple SKUs requires more coordination, but it is still doable with good automated third-party logistic systems.
Finished inventory sits in China already
Goods are manufactured packaged, and ready to ship. This isn’t about restructuring production—just changing how finished goods reach customers.
Hands-off Customer Service
When packages ship individually from China, customers may call about delivery delays, customs questions, and return policies. Companies need customer service tools and trained staff to handle these calls for a positive customer and user experience.
What if the single-unit Direct to Customer Shipping creates More Problems Than It Solves
When Shipping Individual Goods From China Doesn’t Work Well
Not every company can make this work, sometimes the product or existing business operations mean direct to consumer shipping from overseas is not worth it. Here are three signs to look for:
Products are too heavy or bulky
Shipping a 15-pound piece of equipment individually from China costs more than the potential tariff savings. Physics wins this battle every time. Add in returns management and it quickly overwhelms a good business plan.
Customers expect immediate availability for the type of product and its use –
B2B customers especially want products in stock and ready to ship. They’re not waiting two weeks for individual packages from China.
Inventory management gets messy
Managing individual shipments and returns while maintaining accurate inventory counts across multiple SKUs becomes a significant operational burden.
Ways to Reduce Tariff Impact on Finished Goods
The all-or-nothing approach isn’t the only option. Smart companies are finding middle-ground strategies that capture some benefits without the full complexity.
Batch shipping to reduce complexity
Instead of shipping one unit at a time, ship 2-3 units per package order to regular customers. This stays under the $800 threshold while reducing shipping complexity.
Hybrid fulfillment models
Keep some fast-moving inventory in a US warehouse for immediate orders while shipping specialty configuration SKUs individually from China.
Third-party fulfillment partnerships
Companies that specialize in international small shipments can handle the tariff logistics complexity while manufacturers focus on their core business.
Gradual inventory movement
Instead of importing everything at once, move inventory in smaller batches over several months if the tariff code has thresholds that save costs and to wait out a changing tariff landscape. This spreads the potential tariff cost and gives time to adjust strategy as regulations are in flux.
Examples from Design 1st Clients
Based on our recent discussions with clients, we’re seeing companies take different approaches depending on their specific situations.
Some companies with finished goods have paused all shipments to the US, betting that tariff policies might change, as they sell current in-country inventory. This worked for at least one client who resumed shipping when tariffs were temporarily paused.
Others have set up distribution centers in China to ship directly to consumers, taking advantage of the under-$800 rule for individual shipments.
Companies with product still in development have more flexibility to restructure their approach, looking at assembly location, materials, components, and part suppliers to determine better tariff cost strategies moving forward.
Questions to Ask Before Deciding on Tariff Cost Mitigation Strategy
These questions help determine which approach makes sense for your specific situation and whether individual unit direct to customer shipping will solve more problems than it creates.
- Can the product price point absorb international shipping costs while remaining competitive? Calculate the real cost per unit including packaging, handling, and shipping.
- Are customers willing to wait 7-14 days for delivery? Survey them or look at current shipping patterns for clues.
- Is there operational infrastructure to manage individual customer relationships? Consider the customer service, returns processing, and quality control implications.
- What’s the plan if regulations change? The tariff cost threshold could be lowered or eliminated entirely, and tariff regulations continue to evolve. Build flexibility into the approach if possible.
- How does this fit with long-term business strategy? Is this a temporary measure to navigate current tariff uncertainty or a permanent shift in how products reach customers with lower handling costs?
Choosing the Right Approach to Mitigate Tariffs
Small shipment strategies work for some companies in specific situations, but they’re not universal solutions. The companies putting the tactics to good use will treat this as a legitimate business strategy, not a temporary workaround.
If sitting on finished inventory facing potential tariff increases, options are limited. Pay the tariffs, pause shipments hoping for policy changes, or explore alternative fulfillment strategies. Each comes with trade-offs in cost, complexity, and customer experience.
Choose the approach that best fits the specific situation given current trade uncertainties. Small volume shipment strategies deserve consideration for products in the right price range with patient customers, but they’re not escape hatches from broader trade complexity environments.
This article represents general educational guidance based on current regulations and industry observations. Tariff rules and rates change frequently and vary by product classification. Specific situations require consultation with customs brokers, trade attorneys, and logistics professionals. Design 1st provides product development guidance but does not offer customs consulting services.
Share
Need help manufacturing your product idea?
We can help take you from idea to design, prototyping, and volume manufacturing.
