First sale valuation is a U.S. customs valuation method that may allow an importer to declare goods using the price from an earlier sale in a multi-tier transaction, such as the sale from manufacturer to middleman, instead of the higher final sale price to the importer. To use first sale valuation, the earlier sale must be a genuine sale for export to the United States and supported by proper documentation. When applied correctly, it can reduce dutiable value and lower import costs.
First Sale Valuation is a U.S. customs duty reduction strategy where the importer declares the first sale price in a multi-tier transaction as the dutiable value rather than the last sale price. In a typical manufacturer-middleman-importer chain, the importer uses the factory-to-middleman price rather than the higher middleman-to-importer price.
Requirements for First Sale
- The goods must be clearly destined for the U.S. at the time of the first sale
- The first sale price must be bona fide at arm’s length
- The importer must maintain documentation supporting the first sale price
- CBP has ruled that first sale is applicable for dutiable imports
On high-duty rate products, the duty savings from first sale valuation can be substantial. Consult a customs attorney before implementing a first sale program.
For related logistics context, see Dedola’s aftermarket auto parts logistics and glossary entries on Customs Valuation, Commercial Invoice, Customs Entry, and CBP.
