Which Incoterm should ecommerce sellers use?

EXW or FOB when you want control of freight, DDP when you want a landed-cost price per parcel and no customs surprises for customers.

Why do factories prefer EXW?

EXW keeps their cost and liability minimal — convenient for them, but it means your forwarder handles everything from the factory gate.

Does the Incoterm affect my product cost?

Yes — quotes under different Incoterms are not comparable until freight, insurance and duties are normalised.

Incoterms Every Shopify Seller Should Know

The few Incoterms that actually matter for Shopify sellers buying from China — who pays, who owns risk, and where the handoff happens.

Incoterms sound like freight-industry trivia. They’re not. The term on your supplier quote changes who pays for what, who owns the risk if a parcel is lost, and how much customs surprise waits at the end. Ignore them and you’ll compare quotes that aren’t actually comparable.

EXW (Ex Works)

The supplier makes the goods available at their premises. You handle everything after — pickup, freight, customs, delivery. Cheapest quote, most responsibility. Good only if you have your own freight setup.

FOB (Free on Board)

The supplier gets goods to the port of origin and loaded onto the vessel. Risk transfers to you at the ship’s rail. Common for sea freight; you arrange the main carriage and import side.

CIF / CFR

Supplier pays freight (and insurance, for CIF) to the destination port. Risk still transfers at origin, despite them paying transport. Sellers confuse “they paid shipping” with “they own the risk” — they don’t.

DDP (Delivered Duty Paid)

The supplier handles everything to your door, including duties. Most convenient for the buyer, smoothest customs experience, but priced into the quote. Watch that the DDP quote isn’t masking a markup.

Which to use

New or small — DDP reduces moving parts.
Growing, with freight contacts — FOB or EXW can save if you control the chain.
Always — compare quotes on the same term, or you’re comparing apples to anchors.

The takeaway

Incoterms decide where your money and your risk change hands. Pick one deliberately per shipment, compare like-for-like, and never let “free shipping” hide who actually owns the parcel in transit.