Best Practices from the September Call: De Minimis Changes, Responding to “Made In” Questions, and Considering Mexico
Below are the main takeaways from the September 26 Supply Chain Shark Community Call, where a group of business owners shared supply chain challenges and best practices.
Changes to the De Minimis Program and Actions for Businesses
Participants discussed the necessary actions to address upcoming changes to the de minimis program, which currently allows orders valued at $800 or less to be imported without duties, taxes, or extensive documentation. Below are key steps businesses should take:
Review All Products to Identify Potential Increases in Duties: The new changes will exclude many products, especially from China, from the de minimis exemption. As a result, businesses will face higher costs due to duties on previously exempt shipments. These increased costs will tighten margins, particularly for companies in industries such as apparel, electronics, and consumer goods. Businesses should assess the current duties they pay on goods imported into the USA and identify which items will be affected by the changes.
Provide More Detail on Commercial Documentation: Companies will now need to include full HTSUS codes, country of origin, and detailed product descriptions on commercial documents, including invoices and packing lists. Failure to provide this information may cause delays in the import process. Businesses should ensure that these details are accurately included on their commercial invoices and packing lists, and proactively review for accuracy before finalizing an order.
For more information on these changes and additional recommended actions, see our article: Changes to De Minimis and Recommended Action for Businesses.
Responding to Customer Concerns About “Made in China” or Other Countries
Business owners on the call shared strategies for responding to customers who express concerns or leave negative reviews about products made in China or overseas. Best practices discussed include:
Share Job Creation Statistics: Many businesses that import retail products from overseas also create local jobs. One business noted that tracking the number of local jobs supported—such as executive teams, warehousing, marketing, and fulfillment—can provide useful statistics to share with customers.
Share the Sourcing Process: Many companies in the Supply Chain Shark community first explore US-based suppliers. Being transparent with customers about the sourcing process—explaining that the company considered US-based manufacturing but found it unfeasible due to costs, labor, or a lack of contract manufacturers—can build trust.
Explain Why: Offer a clear explanation of why the product is manufactured overseas. In many cases, overseas production benefits from specialized industry clusters that produce higher quality or more affordable products.
Share Geographic Diversification of Other Products: One business shared that informing customers about products manufactured in multiple locations can be helpful. Offering a few SKUs made locally or premium models manufactured in the USA at a higher price point can also address customer concerns.
Diversification of Suppliers and Manufacturers to Mexico
Business owners in the Supply Chain Shark community also discussed the challenges they face in diversifying their supply chains to Mexico. Key challenges include:
Relatively High Costs: Some consumer brand business owners have explored Mexico for contract manufacturing, but find costs are still high compared to Asian-based options.
Shortage of Contract Manufacturers: Demand for manufacturing in Mexico is high, but there is a shortage of contract manufacturers for consumer goods, especially compared to Asia. While Mexico presents an opportunity for businesses with larger budgets and the capital to invest in new operations, it is not a viable option for most start-ups and small businesses.
Sourcing Raw Materials from China/Asia: Companies also warned about reviewing the materials to confirm the product's actual origin. One business shared an example where, despite being assembled in Mexico, the product was still subject to China 301 duties because it sourced components from China.
Sign up for the next Shark Community Call on the Supply Chain Shark portal here: Community Call Sign-Up
