How to Import from China~Trade clause

Now let us talk about the trade clause, we will start from the most common trade clause

 

Fob: (Free on board)

From the literal meaning we could found the point for division of risks~supplier need to send the goods on board. That means before being on board all the risks should be assumed by supplied, such as catch fire in the warehouse, being soaked, lost. But after the goods being on board all the risks are belongs to you

 

Costs depend on Fob trade clause: supplier is in charge on supplying your request goods, transport them to port, do the Customs apply, pay you their local charge. All these costs make up Fob price

 

Note: after the goods being on board, you will need to buy insurance. Of course that all depends on you, if you do not think you need this, then let it go.

 

CIF(Cost,Insurance and Freight)

From the liernal meaning you may found what makes up the costs. Supplier need to pay for the insurance and freight besides Fob costs. Means CIF=Fob+Insurance+freight, freight here we mean international transportation costs.

Risks: same as Fob, but supplier need to but insurance, if they did not buy insurance when any emergency happens supplier will have to pay for that.

 

CFR(Cost and Freight): this one is much easier, Cost and freight make up the CFR price, you need to buy the insurance yourself. CFR=CIF-Insurance=Fob+Freight

 

Same risk with CIF.

 

EXW(EX-works): supplier deliver the goods to you in their factory~done. That price might be good, but you will have to face the Chinese inland transportation, Customs apply, local charge~so complicated, so I do not suggest use this trade clause.

 

DDU(Delivered Duty Unpaid)

Supplier deliver the goods to your pointed place, but they do not in charge of your Customs clearance, duties.

 

Risk, supplier will take the risk before deliver the goods to your pointed place, but if the goods can not deliver to your place because you did not do the Customs clearance and duties, that risks belongs to you.

 

Honestly speaking, in this trade clause, you may save a few trouble but the cost is higher and your still need to do the Customs clearance and duties.

 

DDP(Delivered Duty Unpaid)

This trade clause is similar with you buy something inland, supplier delivery the good to you, and you only need to accept cargo and pay money, seems the most save trouble way, but you save trouble you may also save your profit, I promise you the cost is really high.

 

There are some other trade clause, but not in common, so we pass them. This artile should be a long-winded but honestly speaking in my opinion this article is very boring so I make it as shory I I can but still…… So only remember the FOB, CIF is enough for you.