DDP vs FOB vs EXW: Shipping Incoterms for Clothing Imports Explained

When you get your first manufacturing quote, you'll see a three-letter code next to the price: DDP, FOB, or EXW. These are Incoterms — international rules that define exactly where the manufacturer's responsibility ends and yours begins. Misunderstanding them is one of the most common (and expensive) mistakes new brands make.

The short version: the same garment can be quoted at very different prices depending on the Incoterm, because each term includes a different amount of shipping, duty, and risk in the number. A "cheaper" EXW quote can end up costing more than a "pricier" DDP quote once you add everything up.

Here's what each term actually means, in plain English.

EXW — Ex Works

You take over at the factory door.

Under EXW, the manufacturer's only job is to have the goods ready at their facility. Everything after that — export clearance, local trucking, ocean/air freight, insurance, destination customs, duties, and final delivery — is on you.

• Manufacturer handles: making the goods, packing them.
• You handle: literally everything else, starting from the factory loading dock.
• Best for: large, experienced importers with their own freight forwarder and customs broker in the origin country.
• Risk for new brands: very high. You're managing export paperwork in a country you may not operate in. Not recommended unless you have logistics expertise.

FOB — Free On Board

The manufacturer gets it onto the ship; you handle the sea journey onward.

FOB is the most common term in apparel. The manufacturer covers everything up to and including loading the goods onto the vessel at the origin port — including export clearance and origin-port charges. From the moment it's "on board," responsibility and cost transfer to you: ocean freight, insurance, destination customs, duties, and delivery.

• Manufacturer handles: production, export clearance, transport to origin port, loading.
• You handle: ocean freight, destination customs, duties/taxes, final delivery.
• Best for: growing brands who have (or hire) a freight forwarder at their end. FOB gives you control over freight cost and carrier choice, which matters at volume.
• Why people like it: the FOB price is clean and comparable between suppliers, and you control the biggest variable cost (freight) yourself.

DDP — Delivered Duty Paid

Door to door. The manufacturer handles everything.

Under DDP, the manufacturer (or their logistics partner) delivers the goods all the way to your address, with all freight, customs clearance, duties, and taxes already paid. You receive a box at your door and owe nothing further.

• Manufacturer handles: everything — production, all freight, destination customs, duties, final delivery.
• You handle: receiving the goods and paying the all-in quoted price.
• Best for: new brands, small-to-mid orders, and anyone who wants a single predictable number with no logistics homework.
• Why people like it: zero surprises, zero paperwork, one price. The trade-off is that you're trusting the supplier's logistics markup and have less visibility into the freight component.

Side-by-Side

Responsibility	EXW	FOB	DDP
Production & packing	Maker	Maker	Maker
Export clearance	You	Maker	Maker
Transport to origin port	You	Maker	Maker
Ocean/air freight	You	You	Maker
Destination customs	You	You	Maker
Import duties & taxes	You	You	Maker
Final delivery to door	You	You	Maker
Effort required from you	Highest	Medium	Lowest

The Hidden Costs to Watch

The headline price is never the full story. Before comparing quotes, account for:

• Import duties — vary by garment type and country. Knit vs woven, fiber content, and country of origin all change the rate. Check your country's tariff schedule (e.g. HTS in the US, UK Global Tariff).
• Customs clearance & brokerage fees — flat or percentage fees a broker charges to clear your goods (relevant under EXW/FOB).
• Destination port & handling charges — terminal handling, documentation, and delivery-order fees.
• VAT / sales tax — payable on import in many countries (e.g. UK/EU VAT).
• Insurance — usually a small percentage of cargo value; cheap relative to the protection.

A FOB quote that looks 20% cheaper than DDP can end up higher once duties, brokerage, and freight are added — or it can end up lower if you have efficient freight. The only way to know is to add it all up.

Which Should You Choose?

• First order, small/mid volume, no logistics setup? → DDP. Pay a little more for zero hassle and a predictable landed cost while you learn.
• Scaling, ordering regularly, have or can hire a forwarder? → FOB. You'll save on freight margin and gain control as volume grows.
• Large, experienced importer with origin-country logistics? → EXW, if the extra control is worth the complexity.

A practical path: start on DDP for your first one or two orders, learn how your products clear customs and what duties apply, then graduate to FOB once you understand your landed costs and have a forwarder you trust.

A Note on "Landed Cost"

Whatever term you choose, the number that actually matters is your landed cost — the total per-unit cost to get one finished piece into your warehouse, including the garment, all freight, duties, and fees. Always make pricing and margin decisions on landed cost, never on the ex-factory price alone. A $9 hoodie EXW might be a $14 hoodie landed — and your retail math has to start from $14.

Manufacturing With Flexible Shipping Terms

Potato Apparel quotes in both DDP (door-to-door, all-in, ideal for new brands) and FOB (for brands managing their own freight) — so you can pick the term that fits your stage. We ship worldwide to the USA, UK, Australia, EU, and the Middle East.

Ready to get a quote with a clear landed cost? Start here:

• Custom Clothing Services — how we work, MOQ, and process.
• Custom Hoodie Manufacturer · Custom T-Shirt Manufacturer — popular categories to start with.

Want a DDP quote to your country with duties included? Tell us your product and destination and we'll break down the all-in price.

This guide is general information, not customs or legal advice. Duty rates and import rules vary by country and change over time — confirm current rates with your customs authority or broker.