EXW, FOB or DDP: which China price is actually cheaper
The same tile quoted at USD 6.80 EXW and USD 11.20 DDP is not a 65% price difference — it is two different scopes. Build the landed cost before comparing anything. In practice the EXW quote that looks 14% cheaper than FOB lands within 2% once export packing and inland haul are added.
A buyer receives three quotations for the same tile. One reads USD 6.80 per square metre EXW Foshan, one reads USD 7.90 FOB Shenzhen, one reads USD 11.20 DDP Rotterdam. The obvious reading is that the first is cheapest and the third is expensive. The correct reading is that nothing has been compared yet.
What an Incoterm actually does
Incoterms divide cost, risk and paperwork between seller and buyer at a named point. They say nothing about quality, and nothing about which supplier is better value. They only tell you where the seller’s responsibility stops.
| Term | Seller pays | Buyer pays | Risk passes |
|---|---|---|---|
| EXW | Making the goods, packing for domestic transport | Everything from the factory gate: inland haul, export clearance, freight, duty, delivery | At the factory |
| FOB | Inland haul to port, export clearance, loading | Ocean freight, insurance, import duty, destination charges | When goods are on board |
| CIF | As FOB plus ocean freight and minimum insurance | Import duty, destination charges, inland delivery | When goods are on board |
| DAP | Everything to the named destination, not unloaded | Import duty and clearance | At destination |
| DDP | Everything, including duty and clearance | Nothing after arrival | At destination, cleared |
Read down the table and the three tile quotes stop being comparable. The EXW number excludes export packing, which for tile means fumigated crates and edge protection. The FOB number includes it. The DDP number includes a duty rate, a freight rate and a forwarder’s margin that the other two do not.
Build the landed cost, not the price
The only useful comparison is landed cost at your door, per unit, with the same scope. That means adding, to every quote, the costs it omits:
- Export packing, if the quote is EXW. On tile and stone this is not a rounding error; crates and corner protection can add 4–8% to the goods value.
- Inland haul to port, if the quote is EXW. A 40ft container from Foshan to Yantian is a real number, and it moves with fuel and congestion.
- Ocean freight and insurance, if the quote is EXW or FOB. Freight has been the least stable line in the calculation since 2021, which is exactly why a quote built today should not be compared with one built in March.
- Duty and VAT, at your own tariff code, in your own country. Not the rate the supplier mentions.
- Destination charges: terminal handling, customs broker, delivery. On LCL these often exceed the ocean freight itself.
Do that arithmetic once, on the same spreadsheet, and the ranking usually changes. The EXW quote that looked 14% cheaper than FOB often lands within 2% once packing and inland haul are added. The DDP quote that looked expensive is sometimes the cheapest landed number, because the forwarder behind it buys freight at a rate you cannot access for a single container.
Where buyers lose money on Incoterms
Comparing FOB China with a local delivered price. A domestic supplier quoting delivered to your warehouse includes their freight, their duty (if any) and their margin, and you are comparing that with a number that has had none of those added. This is the single most common source of the “China is 70% cheaper” claim, and most of the gap is the comparison, not the sourcing.
Accepting DDP without knowing the duty rate. Under DDP the seller clears import, which means somebody declared a value and a tariff code. If the declared value is understated to make the DDP number work, the risk sits with you as the importer of record in most jurisdictions. Ask for the entry number and the declared value. A supplier who cannot produce them is not really doing DDP; they are doing “delivered, somehow”.
Assuming EXW means you control the logistics. EXW puts the export declaration on you, which is difficult to arrange from outside China. In practice most buyers use FOB or FCA even when the quote says EXW, and pay a forwarder to handle the gap. That is fine, as long as it is in the landed cost and not discovered at the port.
The one thing that should not be in the comparison
Your agent’s fee, if it is charged on order value, sits outside the goods price and belongs in the total, not in the unit price. Ours is 2–8%, fixed in writing before we start, and it is the same number whether you buy EXW or DDP because the work is the same: find the plant, verify it, negotiate the price, follow the order. What changes with the Incoterm is who pays the freight, not what the sourcing costs.
If you want a comparison built properly, send the quotation you hold to our contact page and we will put it next to a local purchase price on the same specification, landed, with the arithmetic visible. That is the whole point of the two-price quotation.
Common questions
Is FOB or DDP cheaper?
Neither, until the scope is identical. FOB stops when the goods are on board, so ocean freight, duty, destination charges and delivery are still yours. DDP includes all of it, which is why the number is higher. Compare landed cost per unit at your door, with every line added to every quote.
How much does export packing add to an EXW quote?
On tile and stone, crates and corner protection typically add 4–8% to the goods value, before the inland haul to port. That is why an EXW quote cannot be compared directly with an FOB quote from the same plant.
What should I ask for when a supplier quotes DDP?
The customs entry number and the declared value. Under DDP somebody declared a value and a tariff code, and if the value was understated to make the price work, the risk sits with you as importer of record in most jurisdictions. A supplier who cannot produce the entry is not really doing DDP.