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Customs Valuation & Landed Cost

First Sale Rule

Also known as: First Sale for Export

The first sale rule is a valuation strategy that, where a product passes through a middleman before reaching the importer, allows customs value to be based on the earlier sale from the manufacturer to the middleman rather than the later, higher price the importer pays. When the strict conditions are met — a bona fide sale, goods clearly destined for export to the importing country, and an arm's-length price — using the first sale can lawfully lower the dutiable value and therefore the duty owed. The rule demands rigorous documentation of the multi-tiered transaction to withstand customs scrutiny.

The JFS takeLicensed customs broker · Filer 82G

Genuine savings where a multi-tier supply chain qualifies: duty on the factory-to-middleman price rather than the middleman-to-you price. It is legitimate and well established — and evidentiary. You need the first-sale invoices, proof the goods were destined for the United States at that sale, and a price arrived at arm's length and free of nonmarket influences. Related parties can qualify — the evidence has to be better, that is all. Programs fail on documentation, not on principle.

Where it matters for compliance

  • The first sale must be a bona fide sale for export to the United States.
  • The burden is on the importer, and reviews look for the underlying documents rather than a claim.

Related terms

Transaction ValueTransaction value is the primary method of customs valuation: the price actually paid or payable for the goods when sold for export to the country of importation, adjusted by adding certain elements not already included — such as packing, selling commissions, assists, royalties, and the cost of freight and insurance depending on the country's rules.Customs ValuationCustoms valuation is the process of determining the monetary value of imported goods on which ad valorem duties and taxes are assessed, governed internationally by a valuation agreement that establishes a hierarchy of methods.

Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.