EXW vs FOB vs CIF vs DDP: Which Incoterm Saves You More
Incoterms decide where responsibility — and cost — transfers from supplier to buyer. Pick the wrong one and you inherit a customs bill you didn't budget for. Here is the plain-English version.
EXW — Ex Works (cheapest, most responsibility on you)
The supplier makes the goods available at their factory gate. You arrange pickup, freight, insurance and customs. Best only if you already have a freight forwarder you trust.
FOB — Free On Board
The supplier delivers the goods onto the ship at the origin port and clears export. You pay ocean freight and import duties. The most common term for experienced importers.
CIF — Cost, Insurance and Freight
The supplier pays freight and insurance to your destination port, but you still handle import clearance and duties. Slightly more convenient than FOB, with less price transparency on the freight portion.
DDP — Delivered Duty Paid (safest for beginners)
The supplier handles everything — freight, insurance and import duties — and delivers to your door. The price is higher, but there are no surprise customs bills. For first-time importers, DDP is the lowest-risk way to start.
Which should you choose?
- First order / small volume: DDP — predictable total cost, no customs surprises.
- Scaling up with a forwarder: FOB or CIF — more control, lower unit landed cost.
- Large, experienced operation: EXW — maximum control if you manage logistics in-house.
Fis Optical supports all four terms and quotes DDP transparently so you can compare landed cost against FOB. Get a DDP quote →