What duty and tariff issues apply to small batch and low-volume manufacturing?
Confidence 4/5 Established practice
Duty considerations for small batch and low-volume manufacturing:
Small shipments can fall under a destination country's de minimis threshold and clear duty-free, while the same goods in a larger quantity attract duty and formal entry. The US threshold is USD 800 per shipment and the EU has its own low-value regime with VAT treatment that differs from duty treatment. This can change the landed cost of a trial run fundamentally, so it is worth checking the threshold for the specific destination before concluding that a small run is disproportionately expensive.
Sources
- Low-volume manufacturing process selection — Industry practice; process crossover points are widely documented
- De minimis thresholds and informal entry — US Customs and Border Protection
What goes wrong with small batch and low-volume manufacturing
- Choosing a process because it is the one the factory has, rather than the one the volume suits.
- Letting set-up cost hide inside the unit price, which makes the volume trade-off invisible.
- Re-tooling at the crossover instead of planning the transition in advance.
- Assuming a small order gets the same attention as a large one; it needs a factory for which it is not trivial.
- Overlooking de minimis thresholds, which can change the entire landed cost for a small shipment.
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