FOB, EXW and DDP in plain English.

Every quote from a factory carries an incoterm, and most first-time importers read straight past it. That's how a "cheaper" quote turns expensive: two prices with different terms aren't the same product. The three you'll actually meet are EXW, FOB and DDP — and they draw the ownership line at very different places.

EXW — Ex Works

The factory's job ends at its own door. You (or your forwarder) arrange everything from the loading dock onward: domestic trucking in China, export clearance, ocean or air freight, import clearance, delivery. Maximum control, maximum responsibility — and a quote that looks artificially cheap because it excludes the entire journey.

FOB — Free On Board

The workhorse term. The factory delivers export-cleared goods onto the vessel at the named Chinese port; from that moment, risk and cost are yours, managed through your own freight forwarder. FOB keeps you in control of the expensive legs — you choose the forwarder, the schedule and the insurance — while leaving China-side logistics with the people best placed to do them. For most Australian importers doing real volume, FOB is the sensible default to price against.

DDP — Delivered Duty Paid

The convenience term: the seller handles everything to your nominated door, duty and GST included in the price. One number, no logistics to manage — and in exchange, a premium, less visibility into what you're actually paying for each leg, and dependence on the seller's declarations being done properly in your name. Fine for samples and small runs; worth scrutiny for anything at scale.

Choosing per shipment, not by habit

The right term depends on the shipment: volume, urgency, how much visibility you want, and whether you have a forwarder you trust. Compare quotes only after normalising them to the same term, and read the named place carefully — "FOB" with the wrong port named changes the deal. This is exactly the ground our production & freight practice covers, recommendation and reasoning included.