By Private Label Leather · Published · 6 min read
Incoterms are standard trade terms published by the International Chamber of Commerce. They set out who pays for and arranges each leg of transport, and where risk passes from seller to buyer. The term on your quotation changes what the price includes, so always compare quotes on the same term.
EXW — Ex Works
The seller makes the goods available at their premises. The buyer arranges and pays for everything from there, including export clearance. It gives the buyer most control and most work, and export formalities can be difficult for a foreign buyer to handle.
FOB — Free On Board
The seller delivers the goods, export-cleared, on board the vessel at the named port of shipment (for Pakistan, usually Karachi). The buyer pays ocean freight, insurance and import costs, and risk passes once the goods are on board. FOB applies to sea and inland waterway transport; for air freight or containers handed over at a terminal, FCA is the better-suited term.
CIF — Cost, Insurance and Freight
The seller pays freight and minimum insurance to the named destination port, but risk still passes when goods are loaded at origin. The buyer handles import clearance, duties and delivery from the port.
DDP — Delivered Duty Paid
The seller delivers to the named destination with import duties and taxes paid. It is simplest for the buyer, but the price is higher and the seller must be able to act as importer, or work with someone who can, in your country.
Which to choose
- You have a freight forwarder: FOB or FCA usually gives the clearest price comparison and control over shipping.
- Small first order, no forwarder: a delivered term (DAP or DDP) can be simpler; confirm exactly which import costs are included.
- Samples: these normally travel by courier, with charges quoted separately.
Questions to ask
- Which Incoterm and which named place or port does the price use?
- Which Incoterms edition (for example Incoterms 2020)?
- Who arranges insurance, and for what value?
- For delivered terms: are duties, taxes and brokerage included?
Duty rates for leather goods depend on the product's HS code and your country of import; check them with your customs broker before you finalise a target price.
Tell us your destination and preferred terms when you request a quote.
