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CUSTOMER SUCCESS

How Ministry of Supply Claimed $1M+ in Duty Drawback to Supercharge Growth

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Key Results

<2 Weeks

to file a drawback claim

$1M+

claimed with Flexport

Modern apparel brand Ministry of Supply used the Flexport platform and expert services to help them simplify the convoluted Duty Drawback process and reclaim around a million dollars in refunds. They’re now using that infusion of money to invest in R&D, new product launches and expansion into new markets.

Ministry of Supply, a technology-led fashion brand, is pioneering a comfortable, eco-conscious spin on work apparel. They believe that their “Workleisure” products realize the intersection of science and comfort for a look that’s designed for work and beyond the office. Led by a team of engineers who met when they were students at MIT, the brand promotes the concept that work clothes should be stylish, modern, and comfortable.

With the team’s engineering expertise, they design apparel that combines the functionality of athletic clothing, the comfort of loungewear, and the sleekness of business attire.

As innovators focused on consistent growth and sustainability, CEO and co-founder, Aman Advani and his team are always looking for new ways to improve their supply chain while using their limited resources efficiently. One of the ways the company does this is through claiming duty drawback refunds (or government-issued tax reimbursements).

Duty Drawback is available to any U.S. importer who also exports their products. Starting a Duty Drawback program ensures that brands can claim the maximum refund possible from Section 301 tariffs and more. More than 70% of U.S. duty drawback refunds remain unclaimed, that’s $5B in unclaimed drawback in fiscal year 2021 alone. Many brands are just leaving money on the table.

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Large Chunks of Change in Limbo

Around seven years ago when Ministry of Supply was a relatively new company, a friend of the CEO and co-founder, Aman Advani, recommended they reorganize their imports and supply chain. This friend recommended Flexport, another young, tech-led company that offered all the freight forwarding resources they needed, but also provided end-to-end visibility and transparency into their supply chain. In about 3 months, Ministry of Supply decided to start using Flexport for all of their shipments.

For more than two years, their team had also been discussing a plan to reclaim their duty drawback, but never had officially set things in motion due to the level of effort and time it required. In addition, they had already experienced several false starts making them feel like “the juice wasn’t worth the squeeze,” as described by Advani. After connecting with an outside consultancy on another attempt, Aman discovered that the company was potentially missing out on a seven-figure amount in duty drawback. The problem? These claims required a boatload of shipping data and documentation, not to mention the resources and time needed to make this happen.

To simplify this process, Aman turned to Flexport when he learned that we had a dedicated team of duty drawback experts in-house that could help. Since Flexport already handled freight forwarding as well as customs and compliance for Ministry of Supply, all the data needed to make duty drawback claims was already in one place making this an easy decision for Advani and his team.

“Of course, we gave that business to Flexport—they already have all our data. At that point, it was a no-brainer to proceed with the duty drawback program and it took less than six months for the refunds to start flowing in. And this was after two years of spinning our wheels. It was fantastic!”

  • Aman Advani, CEO and Co-Founder, Ministry of Supply

Centralized Data Drives Gigantic Refunds

Many companies avoid filing for Duty Drawback due to the challenging and convoluted process. In fact, billions (yes—with a “B”) of dollars in excess duties are often left unclaimed each year in the U.S. alone. (Despite 70% of it going unclaimed, $2.4 billion in duty drawback was claimed in the U.S. in fiscal year 2021.)

Less than one year ago, along with moving one of their warehouses to Mexico, Ministry of Supply decided to work with Flexport on their duty drawback claims. Now the company only relies on one source of truth instead of pulling information from 6 different parties. This made data collection seamless and the whole process faster and easier.

"Given that we are shipping so much of our freight through Flexport, the best part about working with their team on drawback was that those records were meticulous. So there were actually far fewer data issues."

  • Aman Advani, CEO and Co-Founder, Ministry of Supply

Having all of the data on hand enabled them to work with Flexport’s internal experts to quickly access their records and file and track their claims efficiently. In just six months, the refunds started flowing in.

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Reclaiming Big Bucks with the Help of Industry Pros

Due to their warehouse relocation, Ministry of Supply was both accruing new drawback refunds and filing for historical ones, at the same time. Because of this unique situation, the company filed a claim about once a month for about seven months. Now that they are all caught up with the claims, Advani expects to file a new claim every 2 to 3 months.

The apparel company tracks and measures their drawback success via cash flow and gross profit margins. Additionally, since reclaiming their newly “found” money, the company is able to allocate those funds towards future growth including big strategic initiatives, inventory, insurance and new product development.

Since the start of their claims process in partnership with Flexport, Ministry of Supply has filed eight claims and received around $1M in duty drawback. And that’s just the beginning.

Key Takeaways

1.

Flexport's data-driven platform helped Ministry of Supply reclaim around $1M in duty drawback.

2.

More than 70% of U.S. duty drawback refunds remain unclaimed—that’s $5B of untouched claims in 2021 alone.

3.

Use duty drawback gains to grow your company's strategic initiatives, inventory, insurance, and more.

  • Once you're in Flexport’s system, the platform and tools can grow with your business...that's what we've enjoyed about our partnership. With the right support and data systems in place, any importer can benefit and even grow through duty drawback.

    Aman Advani
    CEO and Co-founder, Ministry of Supply

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