The €3 parcel duty is coming. Here’s what it means for UK brands selling into the EU

‍What’s changing on July 1, 2026

The new rule

Low-value goods (intrinsic value below €150) shipped into the EU will face a €3 customs duty as a temporary measure.

Who it hits

The €3 duty applies to goods entering the EU when the non-EU seller is registered under IOSS (Import One-Stop Shop). The EU Council noted this covers about 93% of eCommerce flows into the EU.

IOSS in one line: an EU system that lets sellers collect and remit VAT at checkout for low-value imports.

What it replaces

Today, many low-value consignments under €150 are exempt from customs duties (VAT still applies). The EU is ending that duty relief via this fixed charge.

Why the EU is doing it

The EU is responding to:

• A surge in low-value parcels, largely originating outside the EU (often cited as coming from Asia)
• Fraud and undervaluation incentives
• Pressure to level the playing field for EU-based merchants
• Customs enforcement capacity strain

The part everyone misses: “€3 per item” can mean more than €3 per order

Several analyses note the duty is applied per item / product type (linked to tariff classification), not “per parcel” in the simple way people assume. Translation: multi-item orders can stack.

Quick examples (illustrative, not legal advice)

• 1-item order under €150 → +€3
• 3 different product types in one parcel → could be +€9

If your brand lives on bundles, kits, or “add 2 more to save,” this matters.

What this will do to UK-to-EU unit economics

You’ll feel it in three places:

1) Margin compression

€3 is nothing on a €200 order.
It’s brutal on a €25 order.

If your contribution margin per order is €6–€10, you just lost 30–50% of it overnight.

2) Checkout friction

EU shoppers already ask:

• “What’s the final delivered price?”
• “Will I get surprise fees at the door?”

If you can’t answer clearly, conversion drops.

3) Returns and CX

More landed-cost surprises = more “refuse delivery” and more support tickets.

Ops change → CX impact → growth outcome. Always.

Quick impact calculator 

Start with two numbers:

• AOV (average order value)
  
• Contribution margin per order (after COGS, pick/pack, shipping, payment fees, returns allowance)
  

Calculation:

Margin hit per order (%) = €3 ÷ contribution margin per order

Examples:

• If your contribution margin is €10/order → €3 is a 30% hit
  
• If your contribution margin is €6/order → €3 is a 50% hit
  
• If your contribution margin is €15/order → €3 is a 20% hit
  

Multi-item behavior:

• If an order fee effectively becomes €6 due to multiple product types → double the hit.

What to do now

 1) Model exposure by order mix

Break your EU orders into:

• Single-item vs multi-item
• Average product types per order
• AOV buckets (under €30 is where the pain concentrates)

 2) Revisit bundling strategy

If the duty stacks by product type, your bundle architecture matters:

• Fewer distinct product types per order
• “Bundle in one SKU” where it makes commercial sense
• Test bundle thresholds vs conversion impact

 3) Tighten product data and classification hygiene

Bad classification = delays, charges, and customer rage.

Make sure your item master data is clean:

• Accurate descriptions
• Consistent categories
• HS/tariff inputs where required by your process

4) Reduce border crossings where it’s justified

If the EU is a meaningful revenue line, the simplest long-term move is often:

• Ship from inside the EU for EU demand
• Reduce low-value cross-border parcel volume

Where Hive can help

If you already do more than 500 orders a month into the EU, or just thinking of launching in the EU, the most durable move is simple:

Consider fulfilling from within the EU

Hive helps UK brands set up inventory in an EU fulfillment center, so EU orders ship from within the EU, not across the UK–EU border. You can use Hive’s fulfillment centers across the EU, while maintaining your UK based account and account manager. 

What you gain

1) Avoid the €3 duty (for EU-bound orders shipped inside the EU)
If goods don’t cross into the EU per order, you’re not triggering a per-order import process.

2) Faster delivery times = higher reorder rates
Shorter transit times and fewer “where is my order” moments and typically higher reorder rates.

3) Lower shipping costs with EU domestic rates
Domestic EU carrier lanes are typically cheaper than cross-border UK→EU shipping.

4) Higher conversion at checkout
Shoppers trust what they recognize: local carriers, predictable delivery dates, fewer surprise fees. When the delivered experience feels “local,” hesitation drops.

5) Fewer border holds and fewer exceptions
No routine customs handoffs per order means fewer delays, fewer failed deliveries, fewer support tickets.

Things to keep in mind

• You’ll likely need local VAT registration (and ongoing filings)
• You’ll need to spend more time on inventory planning per location
• Working capital goes up
• Ongoing monitoring required

A simple decision rule

If a meaningful chunk of your EU orders are low AOV and frequent, shipping from the UK gets punished twice: margin + conversion.
EU fulfillment is the cleanest lever to protect both.

We can help you decide what makes most sense for your business.

‍Request a meeting with our Growth Managers now.