Journal

EXW vs FOB vs CIF vs DDP: Choosing the Right Incoterm for Furniture Imports

The incoterm you choose decides where the freight bill lands, where risk transfers and how predictable your total cost is. For furniture imports \u2014 bulky goods with meaningful freight and duties \u2014 the difference between terms can be thousands of dollars per container. This guide compares the four terms buyers see most and how to pick.

1. EXW \u2014 Ex Works: the lowest price, the most responsibility

Under EXW the supplier makes the goods available at their factory; everything else is yours \u2014 collection, export documentation, customs clearance, ocean freight and the rest. The quoted price is the lowest because it excludes all logistics, but hidden costs and effort (trucking to port, export formalities) make it the riskiest for buyers without an experienced freight forwarder.

2. FOB \u2014 Free On Board: the industry default

Under FOB the supplier delivers the goods to the port of shipment and loads them on board. Cost and risk transfer once the goods are on the vessel, and you handle ocean freight, insurance and destination costs from there. FOB is the most common term in furniture trade because it cleanly splits responsibilities: the factory manages inland transport and export, you control the ocean leg and destination.

3. CIF \u2014 Cost, Insurance and Freight: bundled, but insurance is minimal

Under CIF the supplier pays freight and insurance to the destination port, so the price is higher and includes more. Two caveats: risk still transfers at the port of shipment (the supplier is not liable for transit damage), and the insurance is usually the minimum 110% of the invoice value \u2014 often less than the full replacement value of a furniture container.

4. DDP \u2014 Delivered Duty Paid: maximum convenience, highest price

Under DDP the supplier is responsible for everything through to your door, including import duty and clearance. The price is the highest, but your total cost is fixed up front and there are no surprises at the border. DDP is attractive for first-time importers, smaller teams without customs experience, and any order where predictability matters more than the lowest unit price.

5. How to choose

Match the term to your operation: a team with a freight forwarder and import experience can take FOB and control the ocean leg for the best all-in cost; a smaller buyer without customs capability should price DDP even though the quote looks higher. Whichever you choose, ask the supplier for FOB, CIF and DDP quotes on the same order \u2014 the spread between them reveals their logistics markup and makes your landed cost comparable.

The bottom line: incoterms are a cost-and-risk decision, not a price decision. Price the same order under two or three terms, add your own freight, insurance, duties and inland costs, and choose the term that makes total cost most predictable for your operation.