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Buyer guide · from the factory

DDP vs FOB: Which Is Better When Importing from China?

Both are Incoterms, but they put the line between supplier and buyer in very different places. A factory's view on what each one really includes, what a DDP price can hide, and why we only quote EXW or FOB.

By Chen Jun Liang · 14 October 2026 · 12 min read

Every few weeks a buyer asks us for a DDP price. They want one number that covers the chargers, the freight, the customs and the delivery to their warehouse. It's an understandable request, and some suppliers are happy to give it. We aren't, and this article explains why, along with how DDP vs FOB actually compare.

I'll lean on three guides that currently rank for this question, from Ship4wd, Importivity and Suaid Global, because they explain the Incoterms rules well. Where I disagree with them, I'll say so. We make chargers at Rongjun in Dongguan and ship to importers in the UK, Europe, the Gulf and Africa.

The short answer

FOB: the factory delivers to the ship in China; you choose the forwarder and handle freight, insurance, import clearance and delivery. You see every cost and the customs declaration is in your name. DDP: the seller handles everything to your door, including your country's duty and VAT, for one price. Simpler, but you can't see what's inside the price or what was declared at your border. For regular imports, FOB (or FCA) with your own forwarder is usually cheaper and safer.

FOB: what you're actually buying

FOB stands for Free On Board. Under Incoterms 2020, the seller:

  • gets the goods to the named port of shipment,
  • handles and pays for export clearance in China,
  • loads the goods on board the vessel your forwarder has booked.

Once the goods are on board, the risk passes to you. From there you pay the sea freight, insurance, import clearance, duty, VAT and delivery. In practice your forwarder does all of that and sends you the invoices.

Ship4wd lists the advantages well: a clear handover point, your own choice of carrier and route, and the seller dealing with Chinese export paperwork, which they know better than you.

DDP: what you're actually buying

DDP stands for Delivered Duty Paid. It puts the most responsibility on the seller of all eleven Incoterms. The seller handles export clearance, freight, import clearance in your country, pays the duties and taxes, and delivers to the named place. You unload.

It sounds ideal, and for some situations it is. Importivity, for example, recommends DDP for first shipments and small test runs. But think about what it means for a factory in China to "clear import customs in the UK" or "pay German VAT". The factory doesn't do that itself. It hands the job to a logistics company with its own arrangements at your border, and you don't see how your goods are declared.

RJ502 65W GaN charger with EU plug, the kind of product importers compare under DDP vs FOB
One of our EU-plug chargers. Under FOB, the declaration of this charger at your border is made in your name, at the price you actually paid.

DDP vs FOB side by side

FOBDDP
Export clearance in ChinaSellerSeller
Main freightBuyer (your forwarder)Seller
InsuranceBuyer arrangesSeller's risk
Where risk passesOn board the vessel in ChinaAt your named place
Import clearance, duty, VATBuyerSeller (or its agent)
Who declares the value at your borderYour forwarder, in your nameSomeone the seller chooses
Cost visibilityEvery lineOne number
Transport modesSea and inland waterwayAny

What a DDP price can hide

Importivity's own FAQ makes the key point quietly: some suppliers "exclude certain fees or under-declare values". That second part is the real problem. If a DDP price looks cheap, the usual reason is that the goods are declared at the border at less than you paid, so less duty and VAT are collected.

That's not your supplier's problem once the goods are delivered. It's yours. Customs can compare declared values with payments and market prices, and you are the business that received and sold the goods. With chargers, where UK and EU duty on the usual code is 0%, the main thing being under-declared is VAT, which a VAT-registered importer could have reclaimed or postponed anyway. So the "saving" is small and the risk isn't.

Other things a DDP price can hide:

  • a margin on the freight, which you can't benchmark;
  • slower, cheaper routes that you didn't choose;
  • no record of import VAT in your name, so nothing to reclaim;
  • fees that turn up at delivery because they weren't "included" after all.

A charger example, both ways

Take 1,000 of our XFC 65W chargers for a UK importer. The goods are about US$5.08 to 5.69 a piece. Logistics figures below are illustrative only.

LineFOB with your forwarderDDP quote
GoodsFactory FOB priceOne price.
Breakdown not shown.
Sea freight and insuranceYour forwarder's quote
UK duty on 8504 40 95 900%
Import VAT at 20%Postponed on your VAT return, or paid and reclaimed
Clearance and deliveryYour forwarder's quote
Declared value at the UK borderThe real price, in your nameUnknown

Importivity's example on a US$20,000 shipment came out about 6% cheaper under FOB. For a VAT-registered UK charger importer, FOB has a second advantage: the import VAT is recorded in your name, so you can postpone or reclaim it. Our import duty guide shows the numbers.

FCA, CIF and DAP: the in-between options

FCA instead of FOB

Both Ship4wd and Importivity point out that FOB was written for cargo loaded over a ship's rail. Most chargers travel in containers, often handed over at a depot or a forwarder's warehouse before they ever reach a ship. FCA (Free Carrier) describes that handover more accurately, and it works for any transport mode. Many forwarders still quote on FOB out of habit; if yours prefers FCA, ask your supplier whether it can quote that way.

CIF

Under CIF the seller pays freight and insurance to your port, but the risk is already yours once the goods are loaded in China, and the insurance is only minimum cover. If you go this way, check the policy.

DAP

Suaid Global's recommendation for business imports is worth repeating: if you want delivery to your door but you have your own customs broker, DAP (Delivered at Place) does that. The seller delivers; you clear customs and pay duty and VAT in your own name.

Which term for which situation

Your situationWhat we'd suggestWhy
SamplesExpress courierThe courier clears and bills you on delivery
First order, VAT-registeredFOB (or FCA) + your forwarderDeclaration and VAT in your name from day one
First order, want one price to the doorFOB + a forwarder's door-to-door quoteSimple, but still your declaration
Regular reordersFOB or FCACompare freight, use postponed VAT, build a cost history
You have your own broker but want door deliveryDAPSeller delivers, you clear
You have an agent or warehouse in ChinaEXWYour agent collects and consolidates

Shipping straight to Amazon warehouses

This is where DDP is most common. Forwarders advertise "DDP to Amazon FBA": the goods go from China straight into an Amazon fulfilment centre with duties paid. It can work, but Amazon doesn't act as importer of record for your stock, so someone else's name goes on the import entry. Before you use one of these services, ask who the importer of record is, what value they declare, and whether you'll get the import VAT documents in your own name. If the answers are vague, use a forwarder who clears in your name and delivers to Amazon for you.

Why we quote EXW or FOB, not DDP

We make chargers. We're good at building and testing them and getting them cleared for export from China. We aren't a customs broker in your country, and we'd rather not pretend to be one through a partner you've never met.

  • The declaration is yours. Your forwarder declares the goods in your name, at the price on our invoice.
  • The costs are visible. You can compare freight quotes and see what you pay for.
  • VAT stays with you. Postponed or reclaimed, as your business allows.
  • Our invoice shows the real price. Always.

If you'd like one price to your door, the clean way is to take our FOB price and ask a forwarder for a door-to-door quote. Many will give you exactly that, with the declaration still in your name. Our import guide walks through the rest of the process.

Charger assembly line in Dongguan before goods are shipped FOB from China
Our assembly line. Our part ends when the goods are cleared for export and handed to your forwarder.

Writing it correctly in the contract

Suaid Global's guide is good on this. Always write the term with a named place and the rule set: for example "FOB [port of loading], Incoterms 2020" or "DAP [your warehouse address], Incoterms 2020". Just "FOB" on its own is ambiguous, especially for US buyers, where "FOB Destination" has a different domestic legal meaning.

And remember that Incoterms don't say when ownership of the goods passes. If that matters to you (for accounting or for a dispute), put it in the proforma invoice or contract separately. Our proformas list the Incoterm, the named place, the payment terms (50% before production, 50% before shipment by T/T, L/C on request) and the lead time.

Samples are a special case

Samples travel by express courier (DHL, FedEx, UPS). The courier delivers to your door and bills you for import VAT, any duty and its handling fee before release. Our samples are free, one per model, up to two models, and you pay the courier.

Worker on the GaN charger assembly line, from our factory video Where your FOB order starts: our factory in 29 seconds

FAQ: DDP vs FOB

What is the difference between DDP and FOB?
Under FOB (Free On Board), the seller clears the goods for export and loads them on the ship at the named port in China; from that moment the risk and the costs (sea freight, insurance, import clearance, duty, VAT, delivery) are the buyer's. Under DDP (Delivered Duty Paid), the seller is responsible for everything until the goods arrive at the named place in your country, including import clearance and duties.
Is DDP cheaper than FOB?
Usually not. A DDP price includes the seller's logistics costs and a margin on top, and you can't see the parts. Importivity's worked example comes out about 6% more expensive under DDP. On top of that, a DDP price is only cheap if the duty and VAT are declared correctly, which you can't check.
Is FOB or DDP better for a first order from China?
Many guides suggest DDP for a first order because it's simpler. We'd suggest FOB with a forwarder you choose, even for the first order, because the customs declaration is made in your name at the real value and you learn how your own costs work. If you really want one price to the door, ask a forwarder for a door-to-door quote on top of the factory's FOB price.
What is FCA and should I use it instead of FOB?
FCA (Free Carrier) means the seller hands the goods, cleared for export, to the buyer's carrier at a named place. The ICC designed FOB for cargo loaded over a ship's rail; for containers handed over at a depot, FCA describes what actually happens. Ship4wd and Importivity both point this out. In practice many forwarders still use FOB; if yours prefers FCA, ask your supplier.
Who is the importer of record under DDP?
Under DDP the seller is responsible for import clearance, so it (or someone it appoints) acts as importer. For a Chinese seller shipping into the UK or EU, that usually means a forwarder's arrangement you don't see. If the declared value is wrong, questions can still come back to you as the receiver of the goods.
Does FOB include insurance?
No. Under FOB, risk passes to you when the goods are loaded on the vessel, so you should arrange cargo insurance from that point, usually through your forwarder. Under CIF the seller buys insurance, but only minimum cover.
What is DAP?
DAP (Delivered at Place) is like DDP, except the buyer handles import clearance and pays the duty and VAT. Suaid Global recommends it for business imports where the buyer keeps its own customs broker. It gives door delivery while the declaration stays in the buyer's name.
Does FOB transfer ownership of the goods?
No Incoterm deals with ownership. Incoterms cover who pays which costs and where the risk moves. When ownership passes is a separate point for your sales contract or proforma invoice.
Which Incoterms does Rongjun offer?
EXW (collection at our factory) or FOB (we deliver to the port and clear Chinese export), agreed in your quotation. We don't sell DDP. Your forwarder handles freight, insurance, import clearance and delivery in your name.
How do samples ship from China?
By express courier. The courier delivers to your door and bills you for any import VAT, duty and handling fee before release. Our samples are free and you pay the courier.
How does DDP shipping from China work?
With DDP shipping from China, the seller or their forwarder delivers to your door and pays the import duty and taxes. You pay one price, but you see less of the cost breakdown.

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