The most common costly mistake in importing is comparing an EXW quote with a DDP quote as though they were the same number. They are not remotely the same number.
The three you will actually meet
- EXW (ex works). The goods are yours at the factory gate. You arrange and pay for everything after that, including Chinese export clearance — which is harder for a foreign buyer than it sounds.
- FOB (free on board). The supplier handles export clearance and delivery to the port, loaded on the vessel. You take over from there. The usual sensible default.
- DDP (delivered duty paid). The supplier delivers to your door, duty and clearance included. Simple, and you lose visibility on what you are actually paying for.
| Term | Who clears export in China | Where your cost starts |
|---|---|---|
| EXW | You — harder for a foreign buyer than it sounds | The factory gate |
| FOB | The supplier | Loaded on the vessel — you keep the freight, insurance and import |
| DDP | The supplier | Your door, duty included — and one number you cannot audit |
Why FOB is usually the right starting point
It puts the Chinese-side paperwork with the party that can actually do it, while leaving you control of the freight, the insurance and the import — the parts where your own choices save money. EXW pushes export formalities onto someone without a Chinese entity; DDP hides the cost structure inside one number you cannot audit.
Always ask for the quote on the same Incoterm when comparing suppliers. Two quotes on different terms are not a comparison — they are two different questions.