EXW (Ex Works)
The factory's responsibility ends at their own door. You arrange and pay for everything from pickup at the factory onward — export customs, inland transport, ocean freight, the lot. It looks like the cheapest quote on paper but shifts the most work and risk onto you.
FOB (Free On Board)
The factory handles export customs and delivery to the port, loaded onto the vessel. You take over from there. FOB is the most common basis for furniture quotes because it isolates the factory's real cost from freight variables you'll want to shop separately.
CIF (Cost, Insurance, Freight)
The seller arranges and pays for ocean freight and insurance to your destination port, built into the quoted price. It's convenient for a first-time importer, but you generally lose the ability to negotiate freight rates or choose your own forwarder.
Which one should you choose?
Most experienced furniture buyers default to FOB — it keeps factory pricing transparent and lets you or your agent control freight, insurance and destination handling directly, which usually costs less than a bundled CIF quote once you're placing orders regularly.
What Incoterms do not cover
Incoterms define three things only: where the goods are delivered, when risk passes from seller to buyer, and which party pays which costs along the way. They do not cover payment terms, when ownership transfers, product quality, or what happens if the goods are wrong. A contract that names FOB and nothing else has settled the freight question and left everything else open.
This is why two orders on identical FOB terms can behave completely differently when something goes wrong. The Incoterm decides who pays for a container sitting at the port; the sale contract decides who bears the loss if the furniture inside is defective, and it is worth having both written down.
Where risk passes is not where cost passes
The distinction trips up first-time importers. Under FOB, risk passes to you once the goods are loaded on board, and you pay the freight. Under CIF, the seller pays the freight and insurance to your destination port — but risk still passes to you at loading. If the vessel is lost mid-voyage, the claim runs against your insurer, not the seller's obligation to deliver.
Practically, that means CIF is convenient rather than protective. The seller's insurance is typically at minimum cover for the cargo's value, arranged to discharge their obligation rather than to make you whole. Where the cargo matters, arranging your own cover on your own terms is usually the better position.
DDP and DAP: attractive on paper, awkward in practice
Delivered Duty Paid looks like the simplest possible arrangement — the seller handles everything, including import clearance and duty, and you receive the goods. Delivered At Place is similar but leaves the import clearance and duty to you. On a quotation comparison, DDP often appears competitive.
The difficulty is that a Foshan factory is rarely set up to be the importer of record in your country. It usually means they are relying on a destination agent you have not vetted, with your name absent from the customs record — which complicates anything from a duty query to a warranty claim. Most experienced buyers keep the import side in their own hands for that reason.
Free tool: work out what your order actually lands at per unit with the furniture landed cost calculator — FOB through to delivered.
Common questions
Which Incoterm should furniture buyers use?
Most experienced buyers default to FOB — the factory handles export customs and delivery to the port, pricing stays transparent, and you or your agent control freight from there. EXW shifts all logistics onto you; CIF bundles freight but obscures it inside the price.
What do Incoterms actually define?
Only three things: where goods are delivered, when risk passes from seller to buyer, and which party pays for which transport cost. They say nothing about inspection rights, defect remedies or documents — which is why identical FOB orders behave differently when something goes wrong.
Is CIF safer than FOB for a buyer?
Not really — CIF is convenient rather than protective. Risk still passes at the port of shipment once goods are loaded, and the seller's insurance is typically minimum coverage for the buyer's benefit. You often get better freight rates arranging it yourself or through an agent.
Why avoid DDP for furniture imports?
Delivered Duty Paid looks simplest — seller handles everything including import duty — but a Foshan factory is rarely set up as importer of record in your country. It usually breaks down in practice: the seller can't legally clear customs where they aren't registered.