Two factory quotes for the same product can differ by twenty percent and still cost the same — because one is EXW and the other is DDP. Incoterms define where the seller's responsibility ends and yours begins, and misreading them is one of the most common ways a good sourcing deal turns bad.
EXW — Ex Works: you collect from the factory gate
Under EXW the price covers goods at the factory door and nothing else. Export clearance, origin haulage, ocean or air freight, insurance, UK customs, duty, VAT and final delivery are all yours to arrange and pay. EXW quotes look cheapest because they include the least — they suit buyers with their own freight forwarders and appetite for admin.
FOB — Free On Board: the seller gets it onto the ship
FOB is the workhorse of Asia sourcing: the seller handles export clearance and delivers the goods loaded on the vessel at the origin port; risk and cost transfer to you from that moment. You control (and pay for) the ocean freight, insurance and everything UK-side. FOB keeps freight competitive — you choose the forwarder — while leaving origin-country bureaucracy with the party best placed to handle it.
DDP — Delivered Duty Paid: it turns up at your warehouse
DDP is the opposite extreme: the seller delivers to your door with duty and clearance paid. One number, no surprises — in theory. In practice, check who is acting as UK importer of record, whether import VAT is genuinely included or being quietly passed to you, and what happens if customs queries the shipment. DDP convenience is real, but you are paying the seller's freight margin and trusting their compliance.
Getting it right
Compare quotes on landed cost, never on the headline number, and match the incoterm to your capability: DDP for simplicity, FOB for control, EXW only when you have the logistics muscle to use it. Take 2 Technology has imported under all three for over thirty years and can price your project both ways so the comparison is honest.