Once you have over 100 tons of a selected item, the Custom House will sell all of it except for 50 tons. It will then wait until you once again have over 100 tons before selling again. (Selling items from the Custom House occurs before the dumping of excess items from the Warehouse, so if you have five or six hundred Coats in a colony, all but the last 50 will be sold!)
It will sell even Boycotted items, so once you have a Custom House you need never accept a Tax Hike except for those items you want to buy in Europe (Muskets, Tools, Trade Goods, Horses.)
Also, the Custom House need not be in a port colony, and so reduces the number of ships and wagons you need. (If an enemy ship, or a privateer is in the waters near a colony with a Custom House, a blockade is in effect and the items won't be sold.)