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USA Market - What is the difference between FOB and DDP?

When looking to export your collection, you are bound to deal with INCOTERMS.

These International Commercial Terms set out the responsibilities of the Buyer and the Seller and state who pays for transport, insurance, taxes and duties.

FOB refers to Free On Board. The Seller's responsibilities stop when he puts the goods on a plane or boat in his home country. The Buyer must take then take responsibility for anything happening after that, such as transport from the port/aiport to the store in the USA, as well as paying the duty.

DDP refers to Delivered Duty Paid. This means that the Seller delivers the goods directly to the store in the USA.  The Buyer does not therefore need to take charge of the payment of duty and transport as it is paid by the Seller.

The DDP terms could custom clear the goods up to the Airport/ Port in the USA (DDP JFK - it was used in the past as LDP or landed duty paid) or be DDP Destination-Store. 

Which one should you choose and why?
Be careful, some people recommend that you use the FOB term.

Ask them why?
Interview other Designers and ask them why they recommend FOB/DDP.

Some people recommend FOB as they say it is easier for you ie easier for the Designer.
Our question to you is simple: should it be easier for you or easier for the Buyer?

* Make it easier for you and you will just pick up a few orders.
In addition, you will upset many buyers and the agents as well.
* Make it easier for the Buyer and you will pick up many orders (2/5/10 times more). 

Which term would the American Buyer prefer? Hopefully, you have answered DDP.

If in doubt, call us immediately.

To continue saving money and increasing sales, visit this USA webinar (100% money back guarantee).

HOW TO BE BREXIT PROOF?
We have developed a process and content to transform and bring results. 
Today, your brand must embrace export, be successful and avoid the pitfalls. We work with your team from strategy to execution. We focus on the business of fashion however we take into account your creativity.

Links of interest
International Chamber of Commerce - Incoterms Link 
Visit the other Blog Posts in this section (USA Workshop)

 

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