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Incoterms Explained: EXW vs. FOB
When comparing quotes, it is critical to understand the Incoterms (International Commercial Terms).
1. EXW (Ex Works) – “Factory Price”
- Definition: The price covers only the product cost.
- Your Responsibility: You (the buyer) pay for everything else: Pick-up from our factory, export customs in China, international shipping, and insurance.
- When to use: If you have your own freight forwarder who will pick up the goods from our warehouse in China.
2. FOB (Free On Board) – “Port Price”
- Definition: The price covers the product cost + transport to the port in China + Export Customs Declaration fees.
- Our Responsibility: We ensure the goods are loaded onto the ship/plane in China.
- Your Responsibility: You pay for the International Freight (Sea/Air ticket) and everything upon arrival in your country.
- When to use: Standard for Sea Freight orders where you arrange the ocean leg.
Note: Most Private Label orders are quoted as EXW + Shipping Cost (Courier), meaning we calculate the shipping for you and add it to the invoice.