First-Time Importer Guide: From Section 321 to Formal Entry

Until recently, thousands of DTC brands and e-commerce companies imported goods into the United States without ever interacting with U.S. Customs and Border Protection. The Section 321 de minimis exemption allowed shipments valued under $800 to enter the country without a formal customs entry, without paying duties, and without needing an importer of record. For brands shipping individual orders from Chinese fulfillment centers, this was the operational backbone of their supply chain.

That exemption is now suspended for goods subject to Section 301 and Section 232 tariffs, which covers virtually all products from China. The result is that every shipment — regardless of value — now requires a formal customs entry. If you have never filed one, you need to set up an import operation from scratch.

This guide walks you through the entire process, from obtaining your first tax ID to filing your first entry. It is written specifically for DTC brands and e-commerce companies that are transitioning from de minimis to formal entry for the first time.

Why This Guide Exists: The Transition Moment

The suspension of Section 321 de minimis created a category of businesses that have never been part of the formal import system. Prior to the suspension, an estimated 4 million packages per day entered the United States under de minimis, according to CBP data. A significant portion of these were commercial shipments from e-commerce brands.

These companies now need to build an import compliance infrastructure that more established importers have had for years. This includes a legal identity recognized by CBP, a financial guarantee (customs bond), a product classification system (HTS codes), a filing process (customs entries), and ongoing compliance procedures (record keeping, duty payments, regulatory filings).

The learning curve is real, but the process is manageable. Most first-time importers can be fully operational within a week if they follow these steps in order.

Step 1: Get an Employer Identification Number (EIN)

Your EIN is the foundation of your importer identity. CBP uses it to identify you across all customs transactions. If you already have an EIN for your business (used for tax filings, banking, or payroll), you use the same one for customs purposes. There is no separate customs-specific tax ID.

If you do not have an EIN, apply for one on the IRS website (irs.gov). The application is free and takes approximately 10 minutes. The EIN is issued immediately upon completion of the online application. You will receive a confirmation letter (CP 575) that you should retain — it is the definitive proof of your EIN and you will need the exact number for your customs filings.

Sole proprietors who do not have a business entity can use their Social Security Number, but an EIN is strongly recommended for anyone importing commercially. It provides separation between personal and business records and is what CBP expects for commercial importers.

Step 2: File CBP Form 5106

CBP Form 5106 (Create/Update Importer Identity Form) registers your business with U.S. Customs. This creates your importer record in the Automated Commercial Environment (ACE) system, which is CBP's electronic filing platform.

The form collects your EIN, legal business name, physical address, entity type, and point of contact information. It must be filed before your first customs entry. Your customs broker typically handles this filing on your behalf as part of the onboarding process.

Common errors that delay processing: incorrect EIN (the number one rejection reason — verify against your IRS CP 575 letter), entity type mismatch (LLC vs. corporation must match your IRS registration), and using a P.O. box instead of a physical address. When filed electronically through a broker, processing takes 24 to 48 hours.

Step 3: Get a Customs Bond

A customs bond is a financial guarantee to the U.S. government that duties, taxes, and fees owed on your imports will be paid. CBP will not release any commercial shipment without a valid bond on file. The bond is required by law under 19 CFR Part 113.

You have two options:

Single entry bond. Covers one shipment at one port. Costs $50 to $100 per shipment. Makes sense only if you are importing one or two shipments total.

Continuous bond. Covers all shipments at all U.S. ports for 12 months. Costs $400 to $500 per year. This is the right choice for any brand importing on a regular basis. A continuous bond auto-renews annually and eliminates the delay of obtaining a new bond for each shipment.

Your customs broker arranges the bond through a Treasury-listed surety company. The process typically takes 24 to 48 hours. You will need to provide basic business information and authorize the surety to issue the bond. Greenwich Mercantile handles bond procurement for all clients as part of our standard importer of record setup.

Step 4: Hire a Licensed Customs Broker

A licensed customs broker is the only party (other than the importer themselves) legally authorized to file customs entries with CBP. Brokers hold a license issued by CBP after passing a rigorous examination and background check. There are approximately 14,454 licensed customs brokers in the United States.

Your broker handles the operational side of importing: filing entries, classifying products, calculating duties, submitting required filings (ISF, PGA data), and communicating with CBP on your behalf. For a first-time importer, your broker is also your primary source of compliance guidance.

When evaluating brokers, consider their experience with your product category (different products have different regulatory requirements), their pricing structure (per-entry fees, monthly minimums, surcharges), their communication responsiveness (when your shipment is held, you need answers within hours, not days), and whether they provide proactive compliance guidance or simply file entries reactively.

Greenwich Mercantile charges a flat $100 per filing with no minimum volume requirements, no surcharges, and no setup fees. We handle everything from Form 5106 to your first entry filing.

Step 5: Classify Your Products (HTS Codes)

Every product imported into the United States must be classified under a 10-digit Harmonized Tariff Schedule (HTS) code. This code determines your duty rate, whether your product is subject to Section 301 tariffs, whether any antidumping or countervailing duties apply, and what regulatory requirements (FDA, EPA, CPSC, etc.) must be met.

HTS classification is not a guessing exercise. It follows a structured methodology based on the General Rules of Interpretation (GRI) and must be supported by a thorough analysis of your product's material composition, function, and use. The wrong HTS code can result in overpaying duties (costing you money), underpaying duties (costing you penalties), triggering unnecessary regulatory requirements, or missing required regulatory filings.

Classification errors account for approximately 42% of CBP penalty actions. Your customs broker should perform the classification analysis and provide you with the HTS codes and corresponding duty rates for every product you import. Retain this classification documentation — CBP can request it during an audit.

Step 6: File Your First Customs Entry

With your importer record, bond, broker, and HTS classifications in place, you are ready to file your first entry. Here is what happens when your shipment arrives.

Before the Shipment Arrives

If your goods are arriving by ocean vessel, an Importer Security Filing (ISF), also known as "10+2," must be filed at least 24 hours before the cargo is loaded onto the vessel at the foreign port. The ISF contains 10 data elements about the shipment (shipper, consignee, HTS codes, country of origin, etc.). Failure to file the ISF on time results in a $5,000 penalty per violation — one of the most common first-timer mistakes.

Your customs broker files the ISF on your behalf. To do so, they need your commercial invoice, packing list, bill of lading, and HTS classifications. Provide these documents to your broker as early as possible.

When the Shipment Arrives

Your broker files the customs entry with CBP through ACE. The entry includes the entry summary (CBP Form 7501), which details every line item in the shipment with its HTS code, quantity, value, and duty rate. CBP processes the entry and, if approved, releases the cargo.

Most entries are processed and released within 1 to 3 days. However, CBP may select your shipment for examination (physical inspection of the goods), in which case the timeline extends. First-time importers may experience higher examination rates as CBP establishes a baseline for your import activity.

After the Entry Is Filed

Duties are typically due within 10 working days of the entry date. Your broker will provide you with the duty amount and payment instructions. Most importers pay duties through the Automated Clearinghouse (ACH) system, which allows electronic payment directly from your bank account.

The entry is not final when duties are paid. CBP "liquidates" the entry approximately 10 to 12 months after the entry date. Liquidation is when CBP makes its final determination on the duty amount. If CBP disagrees with your classification, valuation, or origin declaration, it can assess additional duties at liquidation. This is why accurate initial filings are critical.

Step 7: Set Up Ongoing Compliance

Filing your first entry is the beginning, not the end. Ongoing import compliance requires attention to several areas.

Record keeping. CBP requires importers to maintain all import-related records for 5 years from the date of entry. This includes commercial invoices, packing lists, bills of lading, entry summaries, proof of duty payment, HTS classification documentation, certificates of origin, and all correspondence with your customs broker and suppliers. Records must be produced within 30 days of a CBP request.

Duty payment tracking. Track your duty payments against your entries to ensure accuracy. Overpayments can be recovered through a post-entry amendment (within 180 days of liquidation) or through a protest (within 180 days of liquidation). Underpayments should be disclosed to CBP through a prior disclosure or voluntary tender to minimize penalties.

Regulatory compliance. Depending on your product, you may have obligations beyond customs entry. FDA-regulated products (food, cosmetics, supplements, medical devices) require prior notice filings and may require FSVP compliance. CPSC-regulated products (children's products, electronics) require certificates of compliance. EPA-regulated products require compliance with import restrictions. Your customs broker should identify your regulatory obligations during the classification process.

Tariff monitoring. Tariff rates change. Section 301 lists are updated. New AD/CVD orders are issued. Stay current with changes that affect your products. Your customs broker should proactively notify you of tariff changes relevant to your imports.

What Changes Operationally: De Minimis vs. Formal Entry

For DTC brands transitioning from de minimis, the operational shift is significant. Here is a side-by-side comparison.

Cost Breakdown: What Importing Actually Costs Now

Here is a realistic breakdown of the costs a DTC brand faces when transitioning to formal entry.

One-Time Setup Costs

• EIN from IRS: Free
• CBP Form 5106: Free (filed by your broker)
• HTS classification review: Typically included in broker's service; standalone reviews range from $150 to $500 depending on product complexity

Annual Fixed Costs

• Continuous customs bond: $400–$500 per year

Per-Shipment Variable Costs

• Customs broker entry fee: $100 per filing (Greenwich Mercantile flat rate)
• ISF filing (ocean only): Typically $50–$100 per filing
• Merchandise Processing Fee: 0.3464% of customs value ($31.67 minimum, $614.35 maximum)
• Harbor Maintenance Fee (ocean only): 0.125% of customs value
• Customs duties: Variable by product (25%+ for most Chinese imports)

For a DTC brand importing $500,000 in goods from China annually with an average effective tariff rate of 30%, the total duty cost alone is $150,000 per year. This is money that did not exist in your cost structure under de minimis. It must be accounted for in your pricing, margin calculations, and financial projections.

Common First-Timer Mistakes

These errors cost first-time importers the most money and time. Every one of them is preventable.

Wrong HTS codes. Using generic or estimated HTS codes instead of performing proper classification analysis. The consequences range from overpaying duties to CBP penalties of 2 to 4 times the unpaid duties. Have your broker classify every product before the first shipment.

Missing ISF filing. Failing to file the Importer Security Filing at least 24 hours before ocean cargo is loaded at the foreign port. The penalty is $5,000 per violation, and CBP actively enforces it. Ensure your broker has your shipment details early enough to file on time.

Undervaluation. Declaring a customs value that is lower than the actual transaction value of the goods. CBP has sophisticated tools to identify undervaluation, including comparing your declared values against statistical averages for the same HTS codes. Undervaluation triggers penalties under 19 USC 1592 and can result in increased examination rates.

No FSVP for food imports. If you import food products, you are required to comply with the FDA's Foreign Supplier Verification Program (FSVP). First-time food importers often do not know this requirement exists until FDA inspects them. Sixty-four percent of FSVP inspections result in compliance failures.

Shipping goods before the importer record is active. If your goods arrive at a U.S. port before your CBP Form 5106 is processed and your importer record is active, the entry cannot be filed. Your cargo will sit at the port accumulating storage charges ($75 to $300 per day) until the record is established. File your 5106 before shipping.

Not having a bond in place. Similar to the importer record issue, if your customs bond is not active when your goods arrive, CBP will not release the cargo. Coordinate with your broker to have both the 5106 and bond in place before your shipment reaches the port.

This guide reflects U.S. customs entry requirements and procedures as of April 2026. Import requirements, tariff rates, and regulatory obligations are subject to change. This guide is intended as a general overview and does not constitute legal advice. Consult with a licensed customs broker for guidance specific to your products and business.