De Minimis Thresholds and Accounting for Direct-to-Consumer Restaurant Sales

When Your Hot Sauce Goes Global

Let’s say your signature habanero-lime hot sauce becomes a cult favorite on TikTok. Orders start pouring in—from Chicago to Toronto to Tokyo. It’s exciting. It’s chaotic. And then your accountant calls.

“Hey… do you know if your DTC shipments are hitting the de minimis threshold for Canada?”

You pause. “De what now?”

If that sounds vaguely familiar—or like complete gibberish—you’re not alone. But here’s the deal: If you’re a restaurant owner shipping goods internationally, especially direct-to-consumer (DTC), understanding how de minimis thresholds work can mean the difference between smooth deliveries and surprise import fees (read: angry customers, thinner margins, and paperwork headaches).

Let’s break it down.

What Even Is a De Minimis Threshold?

Think of a de minimis threshold as the cutoff value under which a country waives customs duties and taxes for imported goods. It’s like the bouncer at the club: if your package’s value is under the threshold, it gets waved through. Over it? You’re paying to party.

In the U.S., that limit’s pretty generous—$800. But elsewhere? It varies wildly:

• Canada: $20 CAD (unless it’s shipped via courier, then it’s $40 CAD duty-free, $150 CAD tax-free)

• Australia: AUD $1,000

• UK: £135

• EU countries: €150 (and often tax kicks in even lower)

So, that $45 three-pack of sauce you’re shipping to Germany? Yeah—it might be subject to VAT, even if no duties apply.

Why Restaurant Owners Should Care?

Now, you might be thinking, “We’re not some massive brand—we’re just sending out boxes of chili oil to fans.” But here’s where the rubber meets the road:

1. Unexpected Duties = Cart Abandonment:
   If your customers are hit with surprise fees at delivery, they might refuse the package. Or worse—they might never order again.

2. Returns? Good Luck:
   Unlike local returns, international ones are… sticky. If customs has already opened the package or added duty stickers, it’s often not worth the cost or hassle to get it back.

3. Accounting Nightmares:
   If your team doesn’t know how to categorize duties, taxes, and handling fees—especially when they vary by country—it becomes tricky to reconcile books and track profitability.

How to Track and Account for It Without Losing Your Mind

Here’s the thing: dealing with these thresholds doesn’t have to derail your ops. But you do need a solid accounting setup behind the scenes.

Let me explain how smart restaurants are handling this:

• Use Landed Cost Calculations:
  Instead of just recording product cost + shipping, smart operators are starting to include import duties, brokerage fees, and even packaging costs in the total cost of goods sold (COGS). It paints a much clearer picture of profitability.

• Classify International Shipping Fees Separately:
  You want visibility into your DTC logistics spend. Grouping those fees with domestic shipping muddies the water.

• Connect with Platforms That Help:
  Shopify, ShipBob, or Easyship let you collect duties at checkout and estimate taxes ahead of time. No more surprises—for you or your buyer.

• Flag DTC International Sales in Your Books:
  It helps with forecasting, pricing decisions, and potential VAT recovery later if you decide to register abroad.

“But I Only Ship 5 Orders a Month Overseas” – Does This Still Matter?

Honestly? Yes. Here’s why:

Once you cross that de minimis threshold—even for just a few orders—you’re technically triggering tax compliance obligations in that country. While enforcement varies, countries like Canada, the UK, and EU member states have been ramping up enforcement on small overseas sellers. Automated customs audits? They’re real.

And if your DTC sales keep growing (as they often do with viral products), having processes in place early can save a lot of cleanup later.

So What’s a Realistic Next Step?

Here’s what we recommend to restaurant owners dipping their toes into international DTC:

1. Map your most common shipping destinations.
   Look up the de minimis thresholds for each.

2. Talk to your accountant about landed cost tracking.
   Not every bookkeeper is fluent in cross-border e-commerce accounting. Find one who is.

3. Decide whether to collect duties upfront.
   DDP (Delivered Duties Paid) may be more expensive upfront but often saves you (and your customer) a headache later.

4. Set expectations on your site.
   A simple note like “International customers may be subject to duties and taxes upon delivery” goes a long way in managing buyer experience.

Wrapping It Up

Selling direct to consumers outside the U.S. is a powerful way to build your brand—but it comes with strings attached. Small thresholds in foreign countries can snowball into big issues if you’re not prepared.

Whether you’re shipping fermented garlic honey or limited-edition merch, make sure your accounting and fulfillment processes understand the thresholds you’re crossing.

You know what? The devil’s in the details. But with the right systems—and the right advisors—you’ll be shipping smarter, not just harder.