Incoterms are international trade terms that define the point at which risk and responsibility transfer from seller to buyer. The most common for e-commerce importers are EXW, FOB, and DDP.
EXW (Ex Works) means the buyer takes responsibility the moment goods leave the supplier's factory. You arrange and pay for all freight, export customs, and import customs — this gives maximum control but maximum complexity.
FOB (Free On Board) means the supplier delivers goods to the origin port and clears export customs. You take responsibility from the port of loading — typically the most common term for ocean freight from China.
DDP (Delivered Duty Paid) means the supplier delivers to your door with all duties and taxes prepaid. This is the simplest for the buyer but gives least visibility and control — suppliers often inflate DDP quotes to cover duty risk.
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