First Sale Valuation for Duty Reduction

First Sale Valuation for Duty Reduction#

When goods pass through a middleman before export, you can declare the first sale price (factory to middleman) instead of the transaction price (middleman to you). This legally reduces dutiable value by 10-30%. Requirements: arm's-length transaction, goods clearly destined for US at first sale.

Documenting the First Sale Transaction#

CBP requires proof that the first sale was a genuine arm's-length transaction destined for US export. You need: factory invoices, middleman purchase orders, shipping documents showing US destination from the start, and evidence the factory knew goods were US-bound. Weak documentation = denied claims.

Calculating Duty Savings from First Sale#

If your middleman buys at $60 and sells to you at $100, first sale valuation means you pay duty on $60 instead of $100. At 25% duty rate, that's $15 per unit in savings vs $25. On 100,000 units annually, that's $1M in duty savings. The ROI on proper documentation is enormous.

• Use first sale valuation to legally reduce the dutiable value of your imports by 10-30%