Incoterms decide where the seller's responsibility ends and yours begins — and they move quoted prices by 15–30% on the same box. Four terms cover 95% of packaging orders.
EXW (Ex Works) — the factory's door.
You buy boxes sitting in the Guangzhou workshop. Everything after — export clearance, trucking to port, ocean freight, insurance, import, delivery — is arranged and paid by you or your forwarder. Lowest quoted price, most work for you. Sensible only if you already have a trusted freight forwarder in China.
FOB (Free On Board) — loaded on the ship at a Chinese port.
The factory delivers to the port, clears export, and loads the container. From the ship onward, it's yours. This is the industry default for regular importers with a forwarder on their side. The quote includes domestic China logistics; you buy ocean freight onward. For most brands, FOB is the right balance of control and simplicity.
CIF (Cost, Insurance, Freight) — factory pays ocean freight and insurance to your port.
You still handle import clearance, duties, and delivery from your port. Convenient for first-time importers; the factory's freight markup is usually modest. Less flexibility — you don't choose the carrier or consolidation.
DDP (Delivered Duty Paid) — to your door, duties included.
The factory or its agent handles everything including import duty. Maximum convenience, highest price, and be aware: the importer of record is technically the seller's agent, which has tax implications in some markets. Common for sample shipments and small express orders; less common for container volumes.
Practical advice
Compare all quotes on the same term. If you have no forwarder, ask the factory to quote FOB and CIF and take CIF for the first container — you can switch to FOB with your own forwarder once volumes justify it. And note the term on every PO in writing; "same as last time" causes disputes when fuel and rates move.
FAQ
Which Incoterm gives the cheapest total cost?
Usually FOB with your own forwarder once you ship regularly — you cut the factory's freight margin and consolidate if you buy from multiple suppliers. For the first order, CIF or even DDP express keeps friction low while you learn.
Does the Incoterm affect who handles customs paperwork?
Yes — under EXW/FOB/CIF the buyer is the importer of record and handles import clearance and duties; under DDP the seller's side does. Your customs broker relationship matters under everything except DDP.