Two suppliers quote the same product and one looks fifteen per cent cheaper. Very often they are not quoting the same thing at all — one price stops at the factory gate and the other includes getting it onto a ship.
| Term | Seller's cost ends at | You arrange and pay for |
|---|---|---|
| EXW — Ex Works | Goods packed at the factory gate | Everything: inland China transport, export clearance, loading, freight, insurance, Indian clearance, duty, delivery |
| FOB — Free On Board | Goods loaded on the vessel at the Chinese port | Sea freight, insurance, Indian clearance, duty, inland delivery |
| CIF — Cost, Insurance & Freight | Goods at the Indian port, freight and insurance paid | Indian clearance, duty, inland delivery |
| DDP — Delivered Duty Paid | Goods at your address, duty paid | Very little — but you are trusting the seller's duty handling |
Ask for FOB and let us handle freight onward. FOB gives you a clean, comparable factory price, and it keeps control of the shipping leg — where cost differences are largest — on your side rather than buried inside the supplier's quote.
CIF puts freight and insurance on the supplier and leaves you with clearance and duty. It is simple, but you cannot see what freight actually cost, and a supplier's nominated line is not always the fastest route.
DDP looks attractive because a single number covers everything. Be careful: the duty is being handled by someone else, using an import channel you cannot see, and the declaration is still made in your name and against your IEC. If the valuation or classification used was aggressive, the exposure is yours. We generally advise against DDP for regular commercial imports.
Take one 40ft container of hotel furniture. Under EXW you pay the factory for goods only, then separately for trucking to Yantian, export clearance, terminal handling, ocean freight, insurance, Indian clearance, duty and delivery to your warehouse. Under FOB the first three of those are inside the supplier's price. Under CIF, ocean freight and insurance move across too.
The goods never changed. Only the line where the seller's responsibility stops. That is the whole of what an Incoterm decides — and it is why "what is your best price" is an incomplete question until you have said on what terms.
FOB, in most cases. It gives you a comparable factory price and keeps the freight leg visible and controllable.
Not inherently — it just includes more. What matters is whether the freight built into a CIF price is competitive, and you cannot see that from the outside. That is the real trade-off.
Yes. Tell us where you want the price to stop — factory gate, Chinese port, Indian port or your door — and we quote on that basis so you are comparing like with like.
Because the customs declaration is made against your IEC even though someone else is controlling how it is made. If the valuation is challenged later, the liability is yours, not the supplier's.
Have a question about this? Send it to us — we answer with your actual case, not a brochure.
