FOB, CIF, and DDP are the three Incoterms that decide whether the price you see on a quote is close to what you actually pay. Choose the wrong one and a “cheap” factory-gate price hides freight, insurance, duties, clearance fees, and last-mile delivery that you were not budgeting for. This article explains what each term covers, how to compare them on a true landed-cost basis, and when to insist on one over the others.
The three terms at a glance
| Term | Supplier pays | You pay | Risk transfers |
|---|---|---|---|
| FOB | Goods + loading at Chinese port | Ocean freight, insurance, duties, customs clearance, inland delivery | When goods cross the ship’s rail at origin |
| CIF | Goods + ocean freight + insurance to destination port | Duties, customs clearance, inland delivery | When goods are loaded on the vessel at origin (same as FOB for risk; supplier pays freight) |
| DDP | Everything — goods, freight, insurance, duties, clearance, delivery to your door | Nothing beyond the quoted price | At your receiving dock — supplier bears all risk until delivery |
FOB: you control the freight, you own the risk
FOB (Free On Board) is the most commonly quoted term from Chinese factories because it is the simplest for them: they produce the goods, deliver them to the port, and load the container. Everything after that is yours. You hire the freight forwarder, you arrange insurance, you handle import clearance and duties, and you pay for trucking from the destination port to your warehouse.
FOB makes sense when you have a trusted forwarder relationship, you import regularly and understand the landed-cost arithmetic, and your order is large enough that the per-unit freight cost is low. The risk: if you misjudge the freight, customs, or last-mile cost, you absorb the difference. Your first FOB order should be costed with a forwarder quote, not a guess.
CIF: the supplier handles freight, you still handle customs
CIF (Cost, Insurance, and Freight) adds ocean freight and basic insurance to the factory price. The supplier contracts the vessel and pays the freight, but risk still transfers to you when the goods are loaded — the same point as FOB. What changes is that the freight cost becomes the supplier’s problem to manage, and you see one number that covers goods plus shipping to your destination port.
CIF is a middle step that simplifies the freight leg but leaves duties and clearance on your side. The supplier will choose the cheapest reliable carrier; confirm the routing, transit time, and the insurance coverage amount before accepting a CIF quote. Basic marine insurance often covers well below replacement value.
DDP: one number, one accountable party
DDP (Delivered Duty Paid) is the simplest term for the buyer: the supplier quotes a single number that covers everything from the factory floor to your receiving dock, including import duties and customs clearance. You receive the goods and pay the invoice. DDP is the only term that gives you a true landed cost before you commit to the order, because there are no additional bills waiting at the port or the border.
DDP is ideal for first-time importers, smaller or mixed-product orders where freight consolidation matters, and any buyer who wants a predictable budget. The supplier assumes the import risk and expertise, which is why DDP quotes from experienced China-based suppliers often look more expensive on a unit basis — but comparing the total DDP cost against an FOB quote plus your estimated freight, duties, and clearance almost always reveals a smaller gap than the factory-gate price suggests. For more on modelling the full cost chain, see our guide on the true cost of sourcing from China.
How to compare quotes across terms
Do not compare an FOB quote against a DDP quote directly — or skip the comparison entirely by working with a China sourcing partner who quotes DDP as standard. Always use DDP as your comparison baseline: ask every supplier to quote on DDP terms — or at minimum, convert the FOB quote by adding a forwarder estimate, the duty rate for your HS code, and a buffer for clearance and inland trucking. The supplier who quotes the lowest FOB often turns out to be the most expensive on landed cost once the freight and duties settle.
Related products
- Disk brushes — factory-direct DDP pricing
- Strip brushes — landed-cost quotes
- Cylinder brushes — full DDP shipping included
Get a DDP landed-cost answer for your order
Pamin quotes DDP as standard for brush orders and sourcing projects, so the number you see is the number you pay. Send your specification and destination country; we return a single landed-cost figure covering goods, freight, duties, and delivery. Request a quote today.