Disclaimer: this blog post is not legal advice and is for informational purposes only. Please seek guidance from your own legal counsel before utilizing any information you see here.
With the recent announcement of increased tariffs on goods imported into the United States, many DTC and ecommerce business owners are searching for ways to mitigate the financial impact.
One term that’s been gaining attention is tariff deferment - but what does it actually mean? And how can your ecommerce or DTC business take advantage of it?
Let’s break it down.
Tariff deferment allows businesses to delay paying import duties and taxes until after their goods are sold - rather than upfront at the time of import. Instead of tying up capital in customs payments before products even reach customers, brands can leverage this strategy to improve cash flow, reduce financial risk, and scale operations faster. By deferring tariffs until goods are shipped, businesses can reinvest working capital into growth while maintaining compliance. It’s a powerful financial tool for ecommerce brands especially in high-tariff times.
To understand tariff deferment, we first need to examine the differences between traditional and direct supply chain models.
In a traditional model, a retailer purchases merchandise from an overseas factory, typically under FOB (Free on Board) terms (e.g., "FOB Shenzhen Port"). This means the factory delivers the goods to the port, and the retailer works with a freight forwarder to import the container into the U.S.
This model requires brands to pay tariffs upfront on all inventory in the container - regardless of whether the items sell. With tariffs on Chinese imports now reaching over 50%, this can tie up significant capital in unsold inventory for 90+ days, straining cash flow.
In contrast, a direct supply chain model eliminates many of these inefficiencies. Here’s how it works:
This model cuts out unnecessary steps, reducing the time from production to sale from months to just days. The best part? It leverages tariff deferment, so brands only pay duties after goods are shipped and after receiving payment from their customers. That means better cash flow, lower risk, and faster scaling.
If you’re an ecommerce or DTC brand importing goods into the U.S., tariff deferment can be a game-changer - freeing up cash flow, reducing risk, and improving profitability.
Navigating tariffs is tough - but you don’t have to do it alone.
We understand how scary the new tariff landscape is and how high the stakes are for your business. But with the right strategy, you can save money and scale faster. We help hundreds of ecommerce and DTC brands leverage tariff deferment to reduce costs and grow with confidence.
Schedule a risk-free assessment today and start turning tariffs into an advantage.
