Logistics ·7 min read
FOB, CIF or DDP: Which Incoterm Should You Buy On From China?
The practical, money-on-the-line difference between FOB, CIF and DDP — and when each one actually saves you money.
Most buyers default to FOB because that is what the factory quotes — and most buyers leave 5–15% on the table doing so. The right Incoterm depends on three variables: your freight volume, the strength of your customs broker, and how comfortable you are managing risk in transit.
| Incoterm | Who pays freight | Who pays duty | Risk transfers at | Right when |
|---|---|---|---|---|
| FOB | Buyer | Buyer | Origin port | You have a freight forwarder and customs broker you trust. |
| CIF | Seller | Buyer | Origin port | You want a single landed-shipping cost without giving up customs control. |
| DAP | Seller | Buyer | Destination address | You want goods at the door but want to manage your own duty position. |
| DDP | Seller | Seller | Destination address | You want one all-in price, zero customs hassle, lower volumes. |
Heuristic 1
High-volume importers should buy FOB — your forwarder is cheaper than the factory's.
Heuristic 2
New importers with one container a year should buy DDP — pay the premium to skip the learning curve.
Heuristic 3
Mid-volume buyers should benchmark CIF against FOB + own freight every quarter; freight markets move.
Next step
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