Import from China: A Beginner's Guide to Understanding Incoterms and Avoiding Costly Mistakes

When you decide to import from China, one of the most important things to understand—yet often overlooked—is the role of Incoterms. These aren’t just technical terms used by logistics companies; they’re the foundation of your shipping agreement and can drastically affect the cost, responsibility, and risk involved in every order.

In this article, we’ll break down what Incoterms are, how they impact your import process, and which terms are most commonly used when dealing with Chinese suppliers. Plus, we’ll introduce you to a free tool that makes comparing products and suppliers much easier and smarter.

What Are Incoterms and Why Should You Care?

Incoterms (short for International Commercial Terms) are standardized trade terms published by the International Chamber of Commerce. These terms define the responsibilities of buyers and sellers in international transactions, specifying who handles the shipping, insurance, customs clearance, and other logistics.

For example, an Incoterm like EXW (Ex Works) means the buyer has to take care of everything from the factory door onward. In contrast, DDP (Delivered Duty Paid) means the seller handles the entire process and delivers the goods to your doorstep.

Understanding these terms is crucial if you want to avoid hidden fees, customs delays, and shipping misunderstandings.

Common Incoterms When Importing from China

Here’s a breakdown of the most frequently used Incoterms in China-related trade:

1. EXW (Ex Works)

• The supplier delivers goods at their own warehouse or factory.

• You handle everything from there—local transportation, export clearance, international freight, and customs at the destination.

Best for advanced importers who already work with agents in China.

2. FOB (Free On Board)

• The supplier covers all costs until the goods are loaded onto the ship at the port of origin.

• You handle the rest from that point onward.

Ideal for those who want a balance between cost and control.

3. CIF (Cost, Insurance and Freight)

• The seller pays for transportation and insurance until your destination port.

• You’re responsible for customs clearance and delivery to your location.

Convenient, but often includes hidden costs or slow shipping with low-quality freight companies.

4. DDP (Delivered Duty Paid)

• The supplier manages the entire shipping process and delivers goods directly to your address, with duties and taxes included.

Easiest option, especially for beginners, but comes at a higher cost. Always double-check what is included.

How to Choose the Right Incoterm?

Choosing the right term depends on your experience, budget, and logistics setup:

• New to importing? Look for DDP or FOB to minimize hassle.

• Have a freight forwarder or Chinese agent? EXW might offer the best pricing.

• Not sure? Ask for multiple quotes with different Incoterms and compare.

Just remember—never assume what’s included. Always clarify who handles what before placing the order.

The Tool Every Importer Should Use

Finding a good product and comparing suppliers across platforms like Alibaba, AliExpress, 1688, or Taobao can be overwhelming. That’s why smart importers use this Chrome plugin:

AliPrice Search by image for China import

This free plugin helps you:

• Search for the same product on multiple platforms using just an image

• Download and translate product images, and easily copy links

• View detailed product info: total order cost (price + shipping + discounts), minimum order quantity, dropshipping options

• Compare sales volume, and export all data to Excel

• Copy keywords from dropdown suggestions for use in listings or keyword research

 Try it now:
https://chromewebstore.google.com/detail/aliprice-search-by-image/aadbahhifnekkkcbapdfandpimaoacmj?hl=en

This plugin is a time-saver and decision-making booster for anyone sourcing products from China.