The warehouse operator and importer work under a customs bond, with entries and withdrawals typically handled through a customs broker. While in bond, goods can be stored, sorted, cleaned, repacked, or relabeled; manufacturing is generally off the table. The cash-flow logic is simple: duty is paid when goods are withdrawn to be sold, not months earlier when they land. One wrinkle cuts the other way: the applicable rate is the one in effect at withdrawal, so a tariff increase announced after import still hits goods sitting in bond.

The natural comparison is the foreign trade zone. FTZs allow manufacturing, inverted tariff elections, and indefinite storage, but carry heavier setup and compliance overhead; a bonded warehouse allows storage and light manipulation only, capped at five years in the US, and is far simpler to use, often as a paid service at a third-party facility. Typical fits: imports likely to be re-exported, high-duty goods with uncertain demand, and slow-turning stock where deferring duty meaningfully helps working capital. Treat bonded stock like any other inventory in inventory management: it still ties up the cash you paid the supplier, even though customs has not been paid yet.