Three letters on a supplier's invoice quietly decide who pays for what, who arranges which leg, and where risk passes from seller to buyer. Importers who skip those letters find out later — usually via an unexpected bill. Here are the four terms you'll actually meet buying from China.

EXW — Ex Works

The supplier's job ends at their own door: you (through your forwarder) arrange pickup, export clearance, and everything after. EXW gives maximum control and transparency — you see every cost — and pairs naturally with supplier pickup services. The unit price looks lowest because it includes the least.

FOB — Free On Board

The supplier delivers export-cleared cargo onto the vessel at a named Chinese port; you pay and control everything from there. FOB is the workhorse of China ocean buying: the supplier handles the leg they know (local trucking, export formalities), you control the international leg through your own forwarder. Confirm the port matches your freight plan.

CIF — Cost, Insurance and Freight

The supplier's price includes ocean freight and minimum insurance to your destination port — but, crucially, risk passes to you at loading, and destination charges plus import clearance remain yours. CIF looks convenient and sometimes hides inflated destination fees from carriers the supplier chose for their economics, not yours. Ask what happens after arrival before accepting it.

DAP — Delivered At Place

The supplier delivers to your named address; import duties and taxes remain your responsibility. Genuine door service under DAP requires a supplier with real logistics capability at your destination — verify rather than assume.

Choosing as a first-time importer

  • Want control and cost transparency: buy EXW or FOB and run freight through your own forwarder
  • Comparing supplier quotes: convert them to the same term before comparing prices
  • Reading any term: ask "who pays destination charges, and where does risk pass?"

Our document review always confirms the term on your invoice and explains, in plain language, which costs are already inside the price and which are coming later.