Incoterms in brief: EXW, FOB, CIF and DDP
Incoterms define who pays what and who carries the risk at each stage. Misunderstanding them is a common source of extra costs.
The most common terms
- EXW: the seller makes goods available at its premises; you handle everything after.
- FOB: the seller covers costs until goods are loaded on the vessel at the port of loading.
- CIF: the seller pays freight and insurance to the destination port; risk passes at loading.
- DDP: the seller covers all costs including import duties to your address.
Why it matters
When buying from several Yiwu suppliers, each often delivers to the warehouse and shipping is arranged from there. Know exactly who pays domestic delivery and who bears risk before receipt.
Tip
Do not rely on the abbreviation alone. Write in words what the price covers: to the warehouse, to the port, or to the destination, and who pays clearance and duties.
FAQ
Do your quotes state the terms clearly?
Yes, each quote states its scope and who pays charges at destination.
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