The five terms you will actually meet
- EXW — you collect from the factory door and carry everything, including export clearance. Cheapest headline, most work.
- FOB — supplier delivers on board the vessel at the origin port; risk and freight are yours from there. The common default for sea freight.
- CIF — supplier pays freight and minimum insurance to your destination port; import duty and clearance are still yours.
- DAP — delivered to your address, duty unpaid. You clear and pay duty and VAT.
- DDP — delivered to your door, duty paid. Simplest for a first order; verify what 'duty paid' really includes in writing.
Comparing quotations honestly
Convert every quotation to the same term before comparing. Ask each supplier for the same basis — usually FOB — then add your own freight, insurance, duty, VAT and clearance to reach a landed cost per unit. Decide on landed cost, never on unit price.
What to ask for on a first order
For a small first order, DDP or DAP removes most of the ways a new importer loses money. Once volumes are stable, FOB with your own forwarder usually becomes cheaper and gives you control of the schedule.
Do not forget duty classification
Ask the supplier for the HS code they declare and check it against your own customs tariff. A wrong code is your liability at import, not theirs at export.
Questions buyers ask
Which Incoterm is safest for a first import?
DDP or DAP. You trade a little margin for far fewer ways to be caught out on clearance, storage and demurrage.
Is CIF the same as delivered to my warehouse?
No. CIF ends at the destination port. Clearance, duty, VAT and inland transport remain yours.
Who insures the goods under FOB?
You do, from the moment they are on board. Arrange cargo insurance before the vessel sails, not after.
Have a supplier you want checked?
Send us the company name and what you plan to order. We come back with what we can confirm, what we cannot, and what an on-site visit would cost.