For years, ecommerce companies shipping from China have benefited from the section 321 de minimis exemption, which allowed packages valued under $800 to enter the U.S. duty-free.

But with new tariff changes announced in February 2025, that advantage is disappearing. If your business relies on direct fulfillment from overseas, it’s time to rethink your logistics strategy.

Read on to find out why a U.S.-based 3PL is the best solution.

What is the "de minimis" rule?

De minimis is a legal term referring to matters of little importance. In the world of international trade, it describes the U.S. exemption that allows low-value goods (under US$800) to bypass standard customs duties and procedures. This policy has fueled the rise of ecommerce sellers using fulfillment centers in China and other countries (known as "dropshipping") to ship directly to U.S. customers at lower costs.

However, the de minimis loophole has now been closed by the US government. As of February 2025, section 321 de minimis exemptions no longer apply to shipments from China, with additional tariffs of 10% on China and 25% on Canada and Mexico set to take effect as well.

The rise and fall of the de minimis boom

The decision to suspend de minimis shipments from China marks the end of an era for ecommerce. When the duty-free threshold increased from $200 to $800 in 2016, it laid the foundation for companies like Temu and Shein to flourish. By bypassing import taxes, these platforms could sell ultra-cheap goods directly to U.S. consumers.

Between 2016 and 2023, de minimis imports surged from $9.2 billion to $54.5 billion, with nearly 60% of shipments originating from China. However, while the number of shipments nearly doubled from 2019 to 2023 (503.1 million to 1 billion), the total value of imports remained stagnant. The average value per shipment plummeted from $111.71 in 2019 to $54.50 in 2023, reflecting a strategy of pushing ever-lower-priced goods to maintain market dominance.

This loophole put U.S. retailers at a massive disadvantage. Domestic brands paid hundreds of millions in import taxes, while their direct-from-China competitors paid virtually nothing. Now that the loophole is closed, overseas platforms must either absorb the costs, raise prices, or find alternative fulfillment strategies.

What the end of de minimis means for your ecommerce business

If your company has been relying on direct shipping from overseas suppliers to take advantage of the de minimis rule, you’re facing new costs and potential shipping delays. Without duty-free imports, your per-unit expenses will rise, cutting into your margins and potentially forcing price increases on your customers.

The solution? Transitioning your inventory to a U.S.-based 3PL.

By keeping stock stateside, you can avoid customs delays, reduce shipping times, and ensure a more predictable fulfillment process.

How to find the right U.S. 3PL for your business

Not all 3PLs are created equal, and making the right choice is critical for ecommerce brands making the switch. Here’s what to look for:

• Scalability – Can the 3PL handle your current order volume and future growth?

• Tech integration – Does the 3PL seamlessly integrate with your ecommerce platform (Shopify, Amazon, WooCommerce, etc.)?

• Fulfillment speed – Are they strategically located to offer 2-day shipping nationwide?

• Transparent pricing – Do they offer clear and competitive rates without hidden fees?

• Custom solutions – Can they provide kitting, custom packaging, or returns management?

Why Warehut is the best U.S.-based 3PL for small ecommerce brands

At Warehut, we're an industry-leading micro 3PL designed for small and medium ecommerce brands navigating the changing tariff landscape.

We match small ecommerce businesses with powerful, ultra-responsive micro 3PLs located throughout the U.S. Unlike traditional 3PLs, we operate a platform that connects you with a network of micro 3PLs, including neighborhood-scale warehouses, family-run operations, and even brick-and-mortar stores with excess capacity.

This variety allows you to tap into lower-cost localized solutions, optimize your shipping costs, and ensure quicker fulfillment times, all while leveraging Warehut’s powerful software to streamline your operations. By choosing Warehut, you’re gaining access to a broad range of fulfillment options tailored to your specific needs, helping you stay competitive as the landscape shifts.

From full Shopify integration to custom fulfillment solutions, we're laser focused on helping ecommerce startups and small businesses succeed. '

You can book an intro call with us here! 🛖