Two quotes for the same parts can look very different simply because they use different Incoterms. One supplier quotes EXW, another DDP — and the “cheaper” one may cost more once freight, export clearance, insurance and import duties are added. Incoterms (published by the International Chamber of Commerce; current version Incoterms® 2020) define who pays for what and, just as importantly, when the risk of loss passes to you.
The terms you will see most
| Term | Seller delivers / risk passes | Buyer pays | Watch out |
|---|---|---|---|
| EXW — Ex Works | At the seller’s premises, not loaded | Loading, export clearance, all freight, insurance, import | Buyer is responsible for Chinese export formalities — often impractical for foreign buyers |
| FCA — Free Carrier | Handed to the buyer’s carrier at a named place, export-cleared | Main freight, insurance, import | Recommended by ICC for containers and air freight |
| FOB — Free On Board | Loaded on board the vessel at the port of shipment | Ocean freight, insurance, import | Intended for sea and inland waterway transport |
| CIF / CIP | Risk passes at shipment, but seller pays main freight and insurance | Import and onward delivery | Risk is yours during the main voyage even though the seller paid for it; CIP requires broader insurance cover than CIF |
| DAP — Delivered at Place | At your named place, ready for unloading | Import clearance, duties, taxes, unloading | A clear split: seller handles transport, you handle import |
| DDP — Delivered Duty Paid | At your named place, import-cleared | Unloading only | Seller acts as importer — duties may be included opaquely; verify who is importer of record and that the declaration is correct |
Which term to choose
- You have a freight forwarder and want control of cost and timing → FCA (or FOB for sea freight).
- You want door delivery but to handle your own import → DAP, a common choice for samples and small shipments.
- You want a single all-in price → DDP can be convenient, but ask for duties and taxes to be itemised and confirm the importer of record and correct customs valuation.
- Avoid EXW unless your forwarder can legally handle export clearance in China.
Duties, taxes and HS codes
Import duties depend on the product’s HS code, its origin and the destination country’s rules; VAT or sales tax is often added on top. Duties on goods from China have changed frequently in some markets, so check current rates with your customs broker before you calculate margins. An incorrect HS code or undervalued invoice is your risk as the importer, even if the supplier prepared the documents.
Documents to ask for
- Commercial invoice and packing list
- Bill of lading (sea) or air waybill (air)
- Certificate of origin, where it affects duty
- Test reports, declarations of conformity, and safety data sheets (e.g. for batteries) as required
- Inspection report before shipment
Shipping terms are part of the total landed cost. When you request a quote, tell us your destination and preferred Incoterm so prices are comparable.