Delivered Duty Paid (DDP) is a door-to-door service that includes customs and import duties. Select DDP logistics, where the total cost will include the product value, shipping cost, and duty fees. It is highly recommended for small business importers. Many suppliers on Alibaba.com offer a DDP service now. It is currently available to buyers in 28 countries and regions.
Confused when suppliers throw a bunch of strange acronyms (like DDP and CIF) at you when they talk about shipping? These acronyms are part of the Incoterms® rules, and can significantly impact your shipping process. This article will provide the basics of what you need to know when it comes to these abbreviations. Read on to find out which one is the most suitable for use for the majority of small business importers.
What DDP means for small business importers
Difference between DDP and other Incoterms
What are Incoterms? “Incoterms” stands for international commercial terms and it features a set of rules issued by the International Chamber of Commerce (ICC) that serves to facilitate international trade.
For the purposes of this article, here is a brief overview of five terms. For a full list of the Incoterms rules, please refer to the ICC website.
The following two terms apply to sea and inland waterway transport.
FOB indicates that the risk transfers to the buyer once the goods are loaded onto the shipping vessel. The seller (or your supplier) handles export and transportation costs for the goods. The buyer is then liable for the associated costs and risks after the goods have been loaded. FOB should only be used for non-containerized shipments.
CIF means the seller will bear any costs before the goods arrive at the port of destination. After that, the buyer takes care of things like import clearance, unloading, and delivery to the final destination. This could sound like extra risks and costs to the buyer. Yet, CIF could be useful if the seller is very familiar with the local customs clearance processes.
The following terms apply to any mode of transport.
The buyer incurs the risks of bringing the goods to the final destination after getting them from an agreed-upon location with the seller. Sellers are not obligated to load the goods for delivery. Even if they do, the buyer will be paying for any losses incurred during the process. Buyers are responsible for providing and completing all export documentation as well.
EXW might be ideal for larger businesses that wish to merge orders from several suppliers in a single shipment or companies buying from domestic manufacturers that do not export. These companies can order at domestic market prices and handle the export on their own.
This is rather like CIF in that the sellers are responsible for clearing the goods for export. Buyers will then take care of customs clearance after the goods arrive in the country of destination. The cost of unloading at the agreed-upon destination point is borne by the buyer.
DDP (Delivered Duty Paid)
The seller is liable for the goods until they arrive at the place of destination. This means handling import duties and taxes and getting clearance in the buyer’s country.
For small business importers, DDP might be the most convenient and fuss-free arrangement. Buyer liability is reduced since the risk is transferred to the buyer only when the goods arrive at the place of destination.
Who should use DDP
DDP is a good choice for online or offline retailers, small independent project contractors, or anyone whose order is less than one full container, also known as LCL (Less than Container-Load). Considering these buyers might have limited capital and manpower, DDP can help them save on manpower, time, and shipping costs. Therefore, DDP places a minimal obligation on the buyer since the seller is responsible for both export and import clearance and their related fees.
How to find a product with DDP service on Alibaba.com
Here is a quick walk-through on how to find and select products from suppliers that provide DDP logistics solution services.
Step 1: Visit the Alibaba.com homepage and scroll down to find the DDP section under the category of choice.
Step 2: Click on the DDP section to get into the DDP channel.
Step 3: Look for the product of interest and click on it to get to the details page. The product price and shipping cost will be shown. Select the appropriate shipping option. If the supplier provides a DDP service to your destination country, “Duty Incl.” will appear under the shipping cost. The shipping cost will be automatically recalculated if there is a change in the product quantity.
Step 4: Click “Start Order” to place a DDP order directly, or contact the supplier for more details.
Terms & Conditions for using DDP
The Delivered Duty Paid (“DDP”) logistics solution services on Alibaba.com is currently only available for Trade Assurance orders to buyers based in the following countries and regions: Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Luxembourg, Monaco, Netherlands, Poland, Portugal, Republic of Lithuania, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom, United States.
Other terms and conditions
Your entitlement to any benefits under the DDP Pavilion is subject to you selecting DDP as the applicable Incoterms when placing your order at check-out. Read the full list of terms and conditions here.
What DDP means for small business importers
Hopefully, it will now be less of a chore when choosing the most suitable Incoterm for use. The information here can serve as a basic reference for anyone who does online purchases. For smaller businesses, using DDP is convenient and fuss-free. It is a great way to cut down on mundane processes like export and import formalities. Furthermore, costs are lowered when it comes to purchasing from overseas suppliers. Start sourcing from suppliers that provide DDP logistics solution services on Alibaba.com now.
The Incoterms® Rules are protected by copyright owned by ICC. Further information on the Incoterm® Rules may be obtained from the ICC website iccwbo.org. Incoterms® and the Incoterms® 2020 logo are trademarks of ICC. Use of these trademarks does not imply association with, approval of or sponsorship by ICC unless specifically stated above.