What buyers should verify first
A reliable decision starts with evidence that matches the drawing, production volume and business risk. Use the table below during RFQ review; replace assumptions with named documents, owners and acceptance criteria.
| Review area | What good control looks like | Buyer action |
|---|---|---|
| EXW | Buyer controls pickup and most transport tasks | Experienced importer with local pickup solution |
| FOB | Seller delivers on board at named port | Ocean freight with buyer forwarder |
| DDP | Seller arranges delivery and import obligations | Buyer prioritizes simplicity |
| FCA | Seller hands goods to carrier at named place | Often better fit for container/air shipments |
1. Name the exact place
“FOB China” is incomplete. State the Incoterm version and precise port, terminal, factory or destination.
For sourcing approval, convert this point into a written requirement: identify the responsible party, evidence to retain, acceptance rule and response when the rule is not met. This keeps a sample success from being mistaken for a capable production system.
2. Match the term to transport mode
FOB is defined for sea and inland waterway transport. For containerized or air freight, discuss FCA, CPT, CIP or DAP with a qualified forwarder.
For sourcing approval, convert this point into a written requirement: identify the responsible party, evidence to retain, acceptance rule and response when the rule is not met. This keeps a sample success from being mistaken for a capable production system.
3. Separate risk from cost
The point where risk transfers is not always the same as who arranges each expense. Map both.
For sourcing approval, convert this point into a written requirement: identify the responsible party, evidence to retain, acceptance rule and response when the rule is not met. This keeps a sample success from being mistaken for a capable production system.
4. Confirm importer-of-record duties
Under DDP, taxes, registrations and importer rules can be difficult for a foreign seller. Verify feasibility before accepting a low all-in quote.
For sourcing approval, convert this point into a written requirement: identify the responsible party, evidence to retain, acceptance rule and response when the rule is not met. This keeps a sample success from being mistaken for a capable production system.
5. Compare landed cost on one worksheet
Include origin charges, export handling, freight, insurance, duty, tax, brokerage, exams, storage and final delivery.
For sourcing approval, convert this point into a written requirement: identify the responsible party, evidence to retain, acceptance rule and response when the rule is not met. This keeps a sample success from being mistaken for a capable production system.
Practical buyer scenario
Two quotes can have the same unit price but different landed outcomes if one excludes origin handling and the other hides a high DDP logistics margin. Normalize them before supplier selection.
The useful output is a controlled plan, not a promise. Record the drawing revision, assumptions, open questions, required evidence and approval gate in the RFQ or purchase order. For critical applications, obtain engineering, quality and regulatory review appropriate to the product.
RFQ checklist
- Controlled 3D model and 2D drawing with matching revision
- Material grade, condition or temper, and any certificate requirement
- Quantity per release, annual demand and target delivery date
- Critical-to-quality characteristics and agreed measurement method
- Surface finish, cosmetic zones, masking and post-finish dimensions
- Packaging, labeling, Incoterm and destination
- First-article, sampling, traceability and corrective-action expectations
Frequently asked questions
Is DDP always safest for the buyer?
It is simpler on paper, but poor import execution or unclear tax treatment can still create delays and liability.
Does FOB include final delivery?
No. It is a port shipment term for sea or inland-waterway transport.
Which term gives the buyer most freight control?
EXW or FCA can, but they also require more capability and coordination.
Do Incoterms define payment terms?
No. Delivery/risk rules and payment conditions are separate contract issues.
Sources and further reading
Technical note: Examples in this guide are planning guidance, not a universal manufacturing specification. Final capability, certification, tolerances, treatment and acceptance criteria must be confirmed for the exact drawing and contract.
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