Incoterms for Amazon FBA Sellers: EXW vs FOB vs DDP (2026)

Updated July 5, 2026. Incoterms 2020 remain the current ICC rules; the next revision is not expected before 2030. What has changed in 2026 is the tariff landscape around them, and that changes which term protects you.

Every Alibaba quote carries a three-letter code: FOB Shenzhen, EXW Yiwu, DDP Los Angeles. Those letters decide who pays the freight, who files customs, who eats the tariff bill, and who is responsible when a container sits at the Port of Long Beach with a CBP exam hold. Most new Amazon FBA sellers sign off on the code without reading it. This guide explains the five terms you will actually meet when importing from China, what each one really costs you, and which one fits an FBA business in 2026.

The five terms side by side

Incoterms define the handoff point between seller and buyer. Everything before the handoff is the supplier’s cost and risk; everything after is yours.

Notice the pattern: reading down the table, the supplier takes on more and you take on less. The two rows that trip up FBA sellers are the last two, because DAP and DDP look identical until the tariff bill arrives. In 2026, with tariff layers stacking to 38% on common product categories, that one cell is the difference between a predictable landed cost and a surprise CBP invoice.

EXW (Ex Works): you do everything

Under EXW the supplier’s only job is to have the goods ready at their factory door. You arrange pickup in China, export clearance, ocean or air freight, US customs, duties, and final delivery. It is the cheapest unit price on the quote sheet and usually the most expensive landed cost for a small importer, because you are buying every service at retail rates in a country where you have no presence.

EXW has a practical problem for FBA sellers: Chinese export clearance requires an exporter of record in China. Your supplier has one; you do not. In practice your freight forwarder handles it, which means EXW only works when you already have a forwarder with China-side operations. If a supplier pushes EXW to make their price look lower than a competitor’s FOB quote, add roughly $150 to $400 for China-side pickup and export before comparing.

FOB (Free on Board): the default sourcing quote

FOB is what most Chinese suppliers quote by default: they truck the goods to the port, clear Chinese export customs, and load the container on the vessel. From that moment the goods are your cost and your risk. You (through your forwarder) pay the ocean freight, insurance, US customs clearance, duties, and trucking to Amazon.

FOB is a fair, well-understood split and it is the term we recommend when you want control over the freight leg, for example choosing between a full container and LCL consolidation or timing departures around Amazon check-in windows. Two cautions:

• FOB is a sea term. Strictly, Incoterms 2020 says containerized cargo should use FCA instead, and air shipments should never be “FOB”. Suppliers use FOB loosely for everything; the risk transfer point in a dispute may not be where you assumed.
• FOB still leaves the tariff risk with you. Your $8,400 FOB invoice is not your cost. Duties, tariff surcharges, and fees land on top, and the 2026 tariff stack moves twice this year (July 24 and November 10). Budget from landed cost, not FOB price.

CIF (Cost Insurance Freight): freight included, surprises included

Under CIF the supplier also books and pays the ocean freight to a named US port and buys marine insurance. It sounds convenient, and for bulk commodity buyers it is. For FBA sellers it hides two catches. First, the insurance the seller must provide is only minimum cover (Institute Cargo Clauses C) at 110% of invoice value, which excludes most of the damage scenarios e-commerce cargo actually suffers. Second, the supplier controls the freight booking, so they choose the cheapest, slowest routing and you inherit whatever destination charges their carrier’s agent invents. Those “destination handling” fees at the US port routinely erase the savings that made the CIF quote look good.

CIF also stops at the port. Customs clearance, duties, drayage, and delivery to Amazon are still yours. If you are comparing a CIF quote against a DDP quote, you are comparing half a journey against a whole one.

DAP (Delivered at Place): door delivery, but the duty is yours

DAP is the term that most often gets mistaken for DDP. The supplier arranges the entire journey to your named US address, warehouse, or prep center. One thing is carved out: import clearance and duties. You are the importer of record, you need a customs bond and an importer ID, and the tariff bill is yours.

A note on an obsolete term you will still see in supplier emails: DDU (Delivered Duty Unpaid) was retired by the ICC back in 2010. When a supplier says DDU today, they mean DAP. Treat any “DDU” quote as DAP and ask the same question: who is the importer of record, and who pays the duties? If the answer is vague, the quote is not comparable to a real DDP price.

DDP (Delivered Duty Paid): one price, delivered, duties included

DDP is the only term where the supplier side carries the goods all the way to your door with export, freight, import clearance, and duties included in one price. For FBA sellers this is the term that makes landed cost predictable: the tariff risk sits with the provider, priced once, instead of arriving as a surprise bill while your inventory waits at the port. Our DDP shipping guide covers the mechanics end to end, and our DDP China to USA service is exactly this arrangement with our own FBA prep warehouse on the receiving end.

The honest caveat: DDP is only as good as the operator running it. Gray-market DDP providers undercut real quotes by undervaluing goods on the customs entry or smuggling your cargo into consolidated entries under someone else’s bond. When CBP catches it, the seller whose inventory is in the container carries the consequences. The questions that expose a weak DDP operator are in our guide to choosing an Amazon FBA freight forwarder: they should file formal entries, show the duty component in the quote, and classify your HTS codes before pricing, not after.

Worked example: the same shipment under FOB and DDP

Kitchen housewares, $10,000 commercial value, one pallet group by sea from Shenzhen to an Amazon FC in the Southeast, July 2026 rates:

• FOB Shenzhen: $10,000 invoice + ocean freight and US-side fees (roughly $900 to $1,400 LCL) + duties and tariffs at the current stack (base ~3% + Section 301 at 25% + Section 122 at 10% = about $3,800) + customs brokerage, bond, drayage, and delivery. Realistic landed cost: $15,300 to $16,000, assembled from four or five separate invoices that arrive over six weeks.
• DDP to the FC: one quote, roughly the same total when the operator is legitimate, delivered as one number you can put in your margin calculator before you pay the supplier deposit. If a DDP quote comes in far below the FOB math above, the difference is usually being made up on the customs entry, and that risk is yours.

Which term should an FBA seller choose?

• First shipments, or no US customs setup: DDP. You get one price, no bond, no importer-of-record learning curve mid-shipment.
• Scaling sellers who want freight control: FOB, with your own forwarder handling customs brokerage and the delivery leg. You see every cost and can optimize routing per shipment; our walkthrough of shipping from China to Amazon FBA shows where the control points are.
• Avoid EXW unless your forwarder has China-side pickup and the supplier’s EXW discount beats the added origin costs.
• Treat CIF and “DDU” quotes as red flags to renegotiate, not accept: CIF hides destination charges, and DDU is a term that has not existed for sixteen years.

If you want the same shipment priced both ways, request a quote with your product, quantity, and destination FC. We will price it FOB-plus-services and DDP side by side so the comparison is real numbers, not incoterm theory.