Following the news that the EU will remove the duty-free threshold for shipments under €150 on 1 July 2026, we want to share our thoughts on how eCommerce brands can prepare for the change.
In this article, we’ll provide a quick recap of what’s changing, the potential impact, and actions you can take today to forecast the potential impact and, if necessary, begin making preparations so you’re not caught off guard.
For a full recap of the changes, we’d recommend you read our original article on the subject. Otherwise, we’ll start this article with a quick recap below.
In this article
Recap: What’s changing?
From 1 July 2026, the EU will remove the duty-free threshold on shipments under €150. From this date, a minimum of €3 customs duty will apply to low-value imports, with the €3 being charged per tariff classification.
That means multi-SKU cross-border shipments could face €6, €9, €12, or even higher duties depending on the makeup of the order.
This change follows the removal of the US De Minimis threshold in 2025 and indicates a broader global trend towards more expensive international shipping.
Recap: What’s the impact?
The headline here is that from July, cross-border shipping into the EU is getting more expensive. The knock-on effect is not only in your margins, but also in the customer experience and your ability to attract new EU customers.
The full impact will depend on multiple factors, primarily your intra-EU order makeup, your reliance on EU customers, and how you prepare for the changes.
What to do before July 2026
Before committing to any significant changes, it’s good to understand how the new duty rules could affect your business. As we’ve made allusions to in the recap, the real impact will depend on your own real-world order and inventory data.
Taking the time to review how many orders you receive from EU customers, what customers typically buy, and which tariff codes your products fall under can help you build an accurate picture of costs and make a decision based on evidence rather than gut feelings or assumptions.
Understanding your exposure
Assuming you have good order visibility through your order management system or marketplace platform, understanding the cost impact of the tariffs should be relatively straightforward.
A good starting point is the last 12 months of EU order data, which should provide an accurate view of your business today while also capturing seasonality and your current product mix.
Within that 12-month data set, identify the following:
- Total number of EU shipments
- Average order value of shipments
- Average margin of EU shipments
- Typical basket composition of shipments
- How your products are classified under EU tariffs
In the likely event that you’ve not logged the tariff code for each of your products yet, now would be the time to do so.
You can find and attribute tariff codes to your products using this tariff checker tool.
Once you’ve organised this data, you can estimate the impact by looking at how many tariff classifications typically appear in each order and applying the €3 duty per classification.
Multiplying this by your annual EU order volume will give you a rough estimate of the additional cost you may face under the new rules.
What are your options?
Once you have a better understanding of the cost impact of these changes, it’s time to consider the best path forward.
There are three main options you have right now. Those options are:
- Absorb the duty
- Pass the duty to the customer
- Move inventory into the EU
Each of these options will be suitable for some and unrealistic for others. Let’s take a look at each option in a little more detail and try to judge which might be best for your business.
Option 1: Absorb the duty
Choosing to absorb the duty means you’ll pay any fees at the border. Good for your customers, but not so good for you.
The comparison below illustrates when it might make sense to simply absorb the cost, and when it doesn’t.
Option 1 might be suitable if…
- You have high margins that can absorb the extra cost
- You have very low EU order volumes
- Most orders are of a single SKU or fall beneath a single tariff code
Option 1 might not be suitable if…
- You sell low-margin products
- EU customers make up a noticeable part of your volume
- Your orders often contain multiple SKUs
Option 2: Pass the duty to the customer
Passing the duty over to the customer involves charging the duty either at checkout or on delivery. It can be a fair option if implemented properly, and your customer isn’t taken by surprise, or worse, gets their order stuck in customs because an outstanding duty hasn’t been paid.
See the comparison below for when passing on the duty might make sense, and when it might not.
Option 2 might be suitable if…
- You sell low-margin products
- You’re testing the market
- You’re upfront with the cost and communicate it well
Option 2 might not be suitable if…
- You’re competing with local brands
- You rely on subscriptions and/or repeat purchases
- You’re trying to break into the EU market and grow market share
Option 3: Move inventory into the EU
Moving inventory into the EU means you can bypass per-order tariffs and keep stock closer to your end customer. If the European market isn’t a priority, then the effort likely isn’t worth the reward, but if you’re serious about protecting margin and the customer experience, it’s an option worth considering.
Once again, here’s when moving inventory into the EU might make sense, and when it probably wouldn’t.
Option 3 might be suitable if…
- You have ambitions to grow in the EU
- You have a large stock profile that risks higher tariffs
- You have a consistent or growing EU order volume
Option 3 might not be suitable if…
- EU growth isn’t your priority right now
- Your brand is in its early stages, with low EU demand
- Your brand isn’t ready to manage additional operational complexity
Where J&J can help
It’s no secret that cross-border eCommerce is becoming more complex and more expensive. The good thing is that as of today, you still have time to prepare and make the necessary adjustments to your fulfilment strategy… should you deem it necessary.
As a global fulfilment partner, J&J specialise in helping eCommerce brands localise fulfilment so they can keep stock closer to their customers.
We’re not here to tell you what’s right for your business at the stage it’s at right now, but equally, if you believe localised fulfilment in the EU might be worth considering, we’re here to help you take those steps or simply have a no-obligation conversation to assess whether localised fulfilment is for you.
Keep tuned for more information regarding localised EU fulfilment ahead of the big changes on 1 July 2026.
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