Released On 14th Aug 2025

What is Fair Market Value - and Why It Can Cost You at the Border

UPDATED AUGUST 2025

In today’s ultra-competitive global tech market, pricing strategies can make or break a deal. But when products cross borders, a lesser-known challenge often arises: Customs Value vs. Fair Market Value.

Understanding the difference isn’t just helpful – it’s essential to avoiding unexpected import duties, clearance delays, and compliance issues that can derail your international rollout.

Here’s a concise definition of each term:

What is Fair Market Value?

Fair Market Value refers to the price goods would fetch between willing buyers and sellers in an open market – without external pressure or discounts.

What Is Customs Value?

Customs Value is the price a country's border authority believes your goods are worth – not necessarily what you sold them for. It’s used to calculate:

• Import duties
• VAT/GST
• Other clearance-related taxes

Discounts are up, but so are compliance risks

In the IT sector, deep discounts (sometimes 60% off list price or more) are now the norm – especially as businesses try to win deals in regions where budgets are tight. But these discounts can trigger red flags at customs, particularly when importing into countries with strict valuation controls.

Customs officials often research product prices online – comparing the declared value on your invoice against public listings from resellers or vendors. If your declared value is too low (due to heavy discounts), they’ll revalue the shipment – and raise the tax bill accordingly.

Real-world consequences: The hidden cost of revaluation

If customs revalues a $100,000 shipment to $160,000, and the duty rate is 10%, that’s an unexpected $6,000 tax increase. This surprise is typically passed back to the seller – and ultimately, your client.

The result?

• Blown budgets
• Project delays
• Frustrated partners and clients

Other potential risks include:

• Goods being held, delayed or seized by customs
• Audits or compliance investigations
• Damaged reputation and client trust

How Mouse & Bear Solutions helps you stay compliant

At Mouse & Bear Solutions, we specialise in helping IT companies navigate customs valuation with confidence, through our Importer of Record (IOR) service.

We don’t just move goods, we

• Pre-check customs expectations in over 150 countries
• Work with trusted local agents to confirm acceptable declared values
• Provide all-in quotes that include import duties and taxes, so there are no nasty surprises later

Whether you’re shipping software appliances, servers, or edge devices, as technology sector import specialists Mouse & Bear helps ensure your shipments stay compliant and competitive in over 150 countries.

Frequently Asked Questions

Q: Can I use my invoice value as the customs value?

A: Not always. If your pricing reflects steep discounts, customs may override your declared customs value to better represent fair market value, and assign their own.

Q: What happens if customs revalues my goods?

A: You may be charged higher import duty and face delays in clearance. These costs can be significant and unexpected.

Q: How do I prevent customs issues when offering discounts?

A: Work with an experienced Importer of Record who understands how local customs authorities assess customs value and fair market value.

Get Expert Help Today

For tailored advice on pricing and customs clearance, contact us: iorsolutions@mouseandbear.com, call 01935 848526 or send the enquiry form below.

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