Incoterms for buying from China — who pays what, before you pay
Incoterms are the 11 standard rules that decide who handles export, freight, insurance, and import duty on an international order — and where the risk passes. They do not set the price or the duty rate. Here is what FOB, EXW, CIF and DDP mean for a 1688 order, and how each one changes your real landed cost.
Comparison
All 11 Incoterms 2020: who pays, who clears, where risk passes
E and F terms hand over early (you arrange the main freight); C terms mean the seller pays freight but risk still passes at origin; D terms deliver to you. Only DDP puts import duty on the seller.
| Term | Main freight | Export clearance | Import duty / VAT | Risk passes |
|---|---|---|---|---|
| EXWEx Works | Buyer | Buyer | Buyer | At the seller's premises (factory/warehouse) |
| FCAFree Carrier | Buyer | Seller | Buyer | When goods are handed to the buyer's carrier at the named place |
| FASFree Alongside Ship | Buyer | Seller | Buyer | Alongside the vessel at the origin port |
| FOBFree On Board | Buyer | Seller | Buyer | Once goods are on board the vessel at the origin port |
| CFRCost and Freight | Seller | Seller | Buyer | Once goods are on board at origin (risk passes before freight is paid) |
| CIFCost, Insurance and Freight | Seller | Seller | Buyer | Once goods are on board at origin (minimum insurance is included) |
| CPTCarriage Paid To | Seller | Seller | Buyer | When goods are handed to the first carrier |
| CIPCarriage and Insurance Paid To | Seller | Seller | Buyer | When goods are handed to the first carrier (all-risk insurance in 2020) |
| DAPDelivered at Place | Seller | Seller | Buyer | At the named destination, ready for unloading |
| DPUDelivered at Place Unloaded | Seller | Seller | Buyer | At the named destination, after unloading |
| DDPDelivered Duty Paid | Seller | Seller | Seller | At the named destination, cleared for import |
Incoterms® 2020 decide who is responsible for export clearance, main carriage, insurance, and import duty — not the duty amount. The actual duty, VAT/GST, and clearance outcome depend on the destination country's official tariff (USITC HTS, EU TARIC, GOV.UK, CBSA, ABF, Singapore Customs) and your product's classification.
For 1688 buyers
The three you will actually see on a China order
Factory price only
Most 1688 list prices. You (or your agent) arrange everything from the factory door onward.
Loaded on the vessel
The common sea-freight quote. Supplier clears export; you pay ocean freight, import clearance, and duty.
Door-to-door, duty paid
Convenient all-in. Verify what duty/taxes are included and whether the declared value is correct.
Questions
Incoterms 2020: common questions
What are Incoterms in simple terms?
Incoterms (International Commercial Terms) are standard 3-letter rules from the ICC that say who is responsible for each part of moving goods internationally — export clearance, main freight, insurance, and import duty — and exactly where the risk passes from seller to buyer. They do not set the price or the duty rate.
Which Incoterm do 1688 suppliers usually quote?
Most 1688 list prices are effectively EXW (ex-works factory price). When you use a China agent or forwarder, sea shipments are commonly quoted FOB (you pay ocean freight and import), while some forwarders offer DDP (door-to-door including duty).
Who pays import duty and VAT under each Incoterm?
Under every term except DDP, the buyer (importer) clears import and pays duty + VAT/GST. Only DDP puts import clearance and duty on the seller. The actual amount always depends on your destination country's official tariff and product classification — Incoterms never fix the rate.
What is the difference between FOB and DDP for China imports?
FOB means the supplier loads the goods on the vessel and clears export; you pay ocean freight, import clearance, and duty. DDP means the seller delivers to your door with duty paid. FOB gives you control and visibility; DDP is convenient but you must verify what duty and taxes are actually included and whether the value is declared correctly.
Do Incoterms include insurance?
Only CIF and CIP include cargo insurance arranged by the seller (CIP requires higher all-risk cover under Incoterms 2020). For all other terms, insurance is optional and is the responsibility of whoever bears the risk on that leg.
Can Supplymo tell me my exact landed cost from an Incoterm?
Incoterms tell you who is responsible for each cost, not the amount. Send the product, quantity, destination, and HS clue and Supplymo prepares a pre-payment check with the full cost stack — duty and VAT remain official-source-dependent estimates, not guarantees.
In your market
Incoterms & import tax in your country
Not sure which Incoterm protects you on a 1688 order?
Send the product, quantity, destination, and supplier terms. Supplymo prepares a before-payment check — cost stack, who pays what, and the risks — so the Incoterm works for you, not against you.