Incoterms 2020 Guide
International shipping terms that define who pays for what. Essential for import/export.
Most Common Incoterms
| Term | Full Name | Seller Pays | Buyer Pays | Risk Transfers |
|---|---|---|---|---|
| EXW | Ex Works | Nothing (pickup at factory) | Everything | At seller location |
| FOB | Free On Board | To port of origin + loading | Ocean freight + customs + delivery | When loaded on vessel |
| CIF | Cost Insurance Freight | To destination port + insurance | Unloading + customs + delivery | When loaded on vessel |
| DAP | Delivered At Place | To destination (not unloaded) | Unloading + import customs | At destination |
| DDP | Delivered Duty Paid | Everything including customs + duty | Nothing | At destination |
Which Incoterm Should You Use?
- Buying from Alibaba/China? Use FOB (most common) — you control shipping from port.
- Want zero hassle as buyer? Use DDP — seller handles everything including customs and duties.
- Selling internationally? Use EXW (least responsibility) or CIF (covers shipping + insurance).
- Amazon FBA imports? Use DDP — goods arrive duty-paid at Amazon warehouse.