A product that was profitable under de minimis is now a money-loser, how do I find which ones?

Last updated: June 27, 2026

To find unprofitable products after tariffs, recompute each SKU's contribution margin one at a time with its new duty line added, then rank SKUs by how much that duty line eats relative to the contribution they earned before. The losers are the thin-margin imports that used to clear duty-free and now owe duty on their customs value.

The trap is your blended store margin. It still looks healthy because a handful of fat-margin SKUs carry the average, so the imports that flipped negative stay hidden underneath the line. The only way to surface them is a per-SKU recompute. This post gives you a repeatable method to rank SKUs by post-de-minimis duty damage, runs it on a real product down to dollars left, and shows a thin-margin China-origin import going negative once the Section 301 stack lands on top of a small base rate.

How do I find which products went unprofitable after tariffs?

Recompute each SKU's contribution margin individually with its new duty line, because a blended store average hides any single SKU that flipped. The duty a product never used to pay under de minimis now lands on its customs value, and on a thin-margin import that one line can exceed the entire contribution the SKU earned before. Ranking SKUs by that damage tells you which ones to fix first.

Three facts make this an urgent exercise right now, not a someday cleanup:

• The US de minimis exemption is gone. Per U.S. Customs and Border Protection, the 800-dollar Section 321 de minimis threshold was suspended for China and Hong Kong on May 2, 2025 and for all countries on August 29, 2025, made indefinite in CBP rules published June 24, 2026, and is permanently repealed by statute effective July 1, 2027. Low-value imports that used to enter duty-free now owe duty, paid by the importer.
• The legal basis shifted but the tariffs that hurt thin-margin imports did not. The Supreme Court struck down the IEEPA reciprocal tariffs on February 20, 2026, so CBP re-grounded the suspension in the Tariff Act of 1930, while Section 232 and Section 301 tariffs remain in effect.
• The damage stacks. For a China-origin product, the small base rate is the floor and the Section 301 tariff is the part that pushes a thin SKU underwater.

The per-SKU duty-impact test

The duty-impact test is a five-step recompute you run on one SKU at a time. It exists because margin erosion from duty is invisible at the store level. The duty bill arrives weeks later on a carrier or broker invoice, detached from the order that owed it, so an aggregate P&L never connects the two. Running each SKU through these steps reconnects them.

Step 1: Pull the customs value, not the retail price

Duty is assessed on the customs value, which the US measures as the transaction value on an FOB basis, per U.S. Customs and Border Protection. Customs value is the factory price of the goods on the commercial invoice, not the retail price the customer pays and not your landed cost. For an imported SKU, write down the FOB invoice price per unit. That single number is the base every duty line is calculated against.

Step 2: Find the SKU's combined duty rate

The combined duty rate is the base most-favored-nation rate plus any Section 301, Section 232, or antidumping rate that applies to the product's country of origin. Look up the base rate against the product's HTS code in the USITC Harmonized Tariff Schedule, then add the country-specific tariff. For a China-origin good, the Section 301 List rate from the US Trade Representative action stacks on top of the base rate. Treat these as two separate lines that add, not as a single blended percentage, because the base and the 301 rate come from different authorities and either can change on its own.

Step 3: Compute the new duty line in dollars

The new duty line equals the combined rate times the customs value, plus the merchandise processing fee for the entry. Duty is ad valorem, so multiply the percentage by the FOB customs value from step 1. Add the merchandise processing fee, which CBP sets at a flat 2.69 dollars on an automated informal entry for shipments under 2,500 dollars. The sum is the dollar amount that did not exist on this SKU back when it cleared under de minimis.

Step 4: Recompute contribution with the duty line added

Contribution margin per order is the selling price minus unit cost, inbound freight, the new duty line, payment processing, and outbound shipping. Take the SKU's full cost stack, insert the duty line from step 3, and subtract. If the result went from positive to negative, the SKU flipped. If it stayed positive but fell below your margin floor, it is wounded and worth repricing.

Step 5: Rank SKUs by the duty-impact ratio

The duty-impact ratio is the new duty line divided by the contribution the SKU earned before that line existed. A ratio above 1.0 means the duty alone is larger than the whole pre-duty contribution, so the SKU is now a loss-maker. Sort every imported SKU by this ratio, highest first, and you have a triage list. The top of that list is where repricing or resourcing earns the most margin per hour of work.

A worked example: a phone charging cable three-pack

Take a phone charging cable three-pack that sells for 30 dollars on your store. You import it from China, one pack per direct-to-consumer parcel, with a customs value of 16.50 dollars on the commercial invoice. Here are the fresh inputs for this product.

Input	Value
Selling price	30.00
Unit cost of goods (FOB, per pack)	16.50
Customs value (FOB transaction value)	16.50
Inbound freight per pack	0.95
Payment processing (2.9% + 0.30)	1.17
Outbound shipping to customer	5.40
Country of origin	China

First, the duty rate. For a phone charging cable, the US base most-favored-nation rate is 2.6 percent under HTS 8544.42.90, per the USITC Harmonized Tariff Schedule 2026. China-origin cables additionally carry a 25 percent Section 301 List 3 tariff from the US Trade Representative action. So the realistic combined duty on this China-made cable is 2.6 percent MFN plus 25 percent Section 301, about 27.6 percent. The duty is assessed on the 16.50 customs value, not the 30 retail price.

Here is the duty line, split so you can see what stacks on what:

• Base MFN duty = 2.6% × 16.50 = 0.43 dollars
• Section 301 duty = 25% × 16.50 = 4.12 dollars
• Combined duty = 0.43 + 4.12 = 4.55 dollars
• Merchandise processing fee (automated informal entry) = 2.69 dollars flat, per CBP
• New duty line total = 4.55 + 2.69 = 7.24 dollars

The Section 301 portion is 4.12 of that 4.55. The SKU does not flip because of the 2.6 percent base rate. It flips because the 25 percent Section 301 tariff stacks on top of that small base.

Now run the contribution both ways: the way it looked under de minimis, and the way it looks now.

Line	Under de minimis	After tariffs
Selling price	30.00	30.00
Unit cost of goods	(16.50)	(16.50)
Inbound freight	(0.95)	(0.95)
Duty (27.6% × 16.50)	0.00	(4.55)
Merchandise processing fee	0.00	(2.69)
Payment processing	(1.17)	(1.17)
Outbound shipping	(5.40)	(5.40)
Dollars left	5.98	(1.26)

Under the old duty-free assumption this pack left 5.98 dollars, a contribution margin of about 19.9 percent. With the duty line added it leaves negative 1.26 dollars. The same product that printed a fifth of its price in margin now loses money on every order, a 24-point swing in contribution margin, and not one input changed except the duty it never used to pay.

The computed figure: this SKU's duty-impact ratio

Apply step 5 to the cable pack. The duty-impact ratio is the new duty line divided by the pre-duty contribution: 7.24 dollars of duty plus fee, divided by 5.98 dollars of old contribution, equals 1.21. A ratio of 1.21 means the duty line alone is 121 percent of everything this SKU used to earn. That is the cleanest signal you can put on a triage list, and it is why a blended store margin of, say, 35 percent tells you nothing about this product. Sort your imported SKUs by this ratio and the ones above 1.0 are the confirmed money-losers, fix-first.

Why blended margin hides the loser

A blended store margin is an average weighted by revenue, so a few high-margin SKUs mathematically mask a thin import that turned negative. If the cable pack is 4 percent of your revenue and your domestic-sourced bestsellers run 50 percent margins, the store still reports a comfortable blended number while the cable pack quietly loses 1.26 dollars an order underneath it. The store looks fine. The SKU is bleeding. That is the exact failure the per-SKU recompute is built to catch, and it is the same reason tracking margin by SKU and channel beats trusting the dashboard average.

The thin-margin China-origin import is the most dangerous case because it had the least cushion to begin with. A SKU that earned 19.9 percent could not absorb a 24-point duty hit. A SKU that earned 60 percent absorbs the same hit and stays comfortably profitable. Duty damage is not uniform, it is concentrated on exactly the products that could least afford it, which is why you rank rather than treat every SKU the same.

What it costs to skip this

Skipping the recompute means you keep selling the losers at the old price and fund their losses out of the winners. On the cable pack the bleed is 1.26 dollars an order. Sell 900 of these a month and that is 1,134 dollars a month, about 13,600 dollars a year, flowing out on a single SKU you still think is profitable because the store average looks fine. Across a catalog of formerly-duty-free imports, the total is the kind of five-figure leak that only shows up when the year-end P&L comes in light and nobody can point to where it went.

The deeper cost is decision risk. If you scale ad spend on a SKU the duty turned negative, every incremental order loses more money, so a successful campaign accelerates the loss. Finding the flipped SKUs first is what keeps growth from amplifying a leak. Once you have the list, the next decision is whether to reprice or resource the product, which is the work in repricing when tariff rules change, and the duty line itself is part of your true landed cost per order.

Where Agentis fits

Running the duty-impact test once gives you today's list of losers. Keeping it current as HTS rulings shift, Section 301 lists change, and the permanent de minimis repeal lands in July 2027 is the part a spreadsheet cannot do on its own, and that is where real-time enforcement earns its place.

Profit governance is the practice of monitoring and enforcing margin rules in real time across every order, SKU, and channel, so unprofitable activity gets caught and corrected as it happens instead of discovered in a month-end report.

Agentis is a real-time profit governance platform for high-volume Shopify Plus and ShopLine merchants. It monitors margin at the order and SKU level and flags or blocks unprofitable activity before it reaches the P&L, so a cable pack whose duty line dropped it to negative 1.26 dollars gets flagged on order one, not after 900 of them shipped at a loss your blended average never showed you.

Frequently asked questions

How do I find unprofitable products after tariffs without checking every SKU by hand?

Start with imported SKUs whose country of origin carries a Section 301 or other add-on tariff, since those are where duty stacks hardest, then rank them by the duty-impact ratio. Sorting by that ratio puts the confirmed losers at the top, so you fix the worst few rather than auditing the whole catalog.

Why did a SKU flip from profitable to a loss when the base duty rate is only 2.6 percent?

A thin-margin China-origin SKU flips because the 25 percent Section 301 tariff stacks on top of the 2.6 percent base rate, for a combined duty of about 27.6 percent on its customs value. On the cable pack that combined duty plus the merchandise processing fee is 7.24 dollars, more than the 5.98 dollars of contribution the SKU earned before, so it goes negative.

Is duty calculated on my retail price or the customs value?

Duty is calculated on the customs value, which the US measures as the transaction value on an FOB basis, per U.S. Customs and Border Protection, not your retail price. On the cable pack the 27.6 percent combined rate applies to the 16.50 dollar customs value, giving 4.55 dollars of duty, not 27.6 percent of the 30 dollar selling price.

Does my blended store margin tell me which SKUs are losing money after tariffs?

No. A blended store margin is a revenue-weighted average, so a few high-margin SKUs mask any thin import that turned negative. The cable pack can lose 1.26 dollars an order while the store still reports a healthy blended number, which is why you have to recompute contribution one SKU at a time.

Do low-value imports really owe duty now that de minimis is gone?

Yes. Per U.S. Customs and Border Protection, the 800-dollar Section 321 de minimis exemption was suspended for all countries on August 29, 2025, made indefinite in rules published June 24, 2026, and is permanently repealed by statute effective July 1, 2027. Parcels that used to clear duty-free now owe duty on their customs value, paid by the importer.

The one thing to do today: pick your single highest-volume China-origin SKU, pull its FOB customs value and its combined duty rate from the USITC schedule, and run the duty-impact ratio on it. If the ratio is above 1.0, you found a confirmed loser you can reprice this week.