What is the main difference between EXW and FOB?

Under EXW (Ex Works), the buyer is responsible for everything from the factory door. Under FOB (Free On Board), the seller is responsible for the goods and the export costs until they are loaded onto the ship.

Is FOB better for beginners than EXW?

Yes, FOB is generally recommended for beginners because the Chinese supplier handles the domestic transport and Chinese export customs. This removes the need for the buyer to navigate local Chinese logistics and regulations.

Does FOB include shipping costs to my country?

No, FOB only covers the costs until the goods are on the ship. You are still responsible for the ocean freight, insurance, and all import costs in your home country.

Who pays for export customs in EXW?

In an EXW agreement, the buyer is responsible for clearing export customs in China. This often requires the buyer to hire a specialized agent in China who has an export license.

Why do most Chinese suppliers prefer FOB?

Suppliers prefer FOB because it gives them control over the local transport and ensures the goods are exported under their own business license. It is also the standard industrial benchmark for pricing.

Can I switch from EXW to FOB after an order?

You can request a change, but it will likely result in a higher unit price because the supplier must now cover the trucking and export port fees. It is best to finalize this before paying the deposit.

How does EXW vs FOB affect my insurance costs?

Under FOB, your insurance risk typically begins once the goods are on the vessel. Under EXW, you need to insure the goods from the moment they leave the factory warehouse to cover potential transit damage on the way to the port.

Seo Landing | Import From China

Importing products from China offers a massive opportunity for entrepreneurs to access high-quality manufacturing and significant profit margins in a global market. However, success depends heavily on your ability to navigate the complexities of international logistics, starting with a clear understanding of your shipping responsibilities.

Why Import from China to Global?

China remains the 'World's Factory' because it offers an unparalleled manufacturing infrastructure that can scale with your business. From the high-tech hubs of Shenzhen to the massive wholesale markets of Yiwu, the sheer variety of products and competitive pricing models makes it the primary destination for global e-commerce sellers and traditional retailers alike.

When you source globally, you aren't just buying products; you are leveraging decades of specialized industrial knowledge and logistics networks. By importing directly from the source, you bypass domestic wholesalers who often add a 30% to 50% markup. This allows you to offer more competitive prices to your customers while maintaining a healthy bottom line.

Furthermore, Chinese suppliers are increasingly sophisticated in handling international requirements, including compliance with safety standards for the US, EU, and Australian markets. With the right knowledge from platforms like HowToImportFromChina.com, you can tap into this ecosystem and build a sustainable brand with global reach.

Step-by-Step Import Process for Global

Find a Reliable Supplier: Start by searching platforms like Alibaba or Global Sources to identify manufacturers with high transaction levels and 'Verified' status. Always check their business license and past customer reviews to ensure they are a legitimate factory rather than a small trading company.
Negotiate Terms and Prices: This is where you apply your knowledge of Incoterms. You must decide whether you want an EXW (Ex Works) or FOB (Free On Board) price. Negotiate not just the unit price, but also the packaging quality and the specific port of departure to ensure there are no hidden costs later.
Place Your Order and Arrange Samples: Never skip the sampling phase. Order a 'Golden Sample' to verify quality before paying the 30% deposit. Once the sample is approved, use a detailed Purchase Order (PO) that specifies the agreed-upon Incoterms to protect your legal interests.
Arrange Shipping: Based on your choice between EXW and FOB, you will need to coordinate with a freight forwarder. If you chose FOB, your supplier will handle the transport to the Chinese port. If you chose EXW, your forwarder must pick up the goods directly from the factory floor.
Clear Customs in Global: You or your broker must file the necessary paperwork with agencies like U.S. Customs and Border Protection (CBP) or HMRC in the UK. This involves declaring the correct HS Code for your products and paying the applicable duties and taxes based on the commercial invoice value.
Receive, Inspect and Sell Your Goods: Once the goods clear customs and arrive at your warehouse or an Amazon FBA center, perform a final quality check. If everything is in order, you are ready to launch your marketing campaigns and start generating sales in your local market.

Costs and Customs Duties in Global

Understanding the total 'landed cost' is vital for your business survival. Your landed cost includes the product price, shipping, insurance, and the various fees charged by customs authorities at the border. Many beginners forget to factor in the customs brokerage fees, which can add a few hundred dollars to every shipment regardless of size.

Customs duties are calculated based on the Harmonized System (HS) code of the product. These rates can vary significantly depending on the trade relations between China and your specific country. For instance, the US often applies Section 301 tariffs on Chinese goods, while European countries focus heavily on Value Added Tax (VAT) collection upon entry.

Duty Rate: Typically ranges from 0% to 25% for most consumer goods depending on the country
VAT/Sales Tax: Usually 20% in the UK, an average of 19-21% in the EU, and varies by state in the US
Shipping Cost: Expect to pay $1,500 to $4,000 for a 20ft container (LCL rates vary by cubic meter)
Customs Brokerage: Generally costs between $100 and $300 per entry filing

Best Products to Import from China to Global

China excels in producing consumer goods that have high demand-to-weight ratios, making them ideal for international shipping.

Eco-Friendly Packaging: Sustainable mailers and biodegradable containers are booming as global regulations tighten on single-use plastics
Home Office Accessories: Ergonomic mouse pads and laptop stands remain top sellers as remote work becomes a permanent fixture
Fitness Equipment: Resistance bands and yoga mats are high-margin items that are relatively cheap to ship via sea freight
Smart Home Gadgets: LED strip lights and smart plugs are popular electronic imports that benefit from China's advanced tech manufacturing
Kitchen Utensils: Silicone baking mats and stainless steel gadgets offer great durability and low return rates
Pet Supplies: Interactive toys and grooming tools are evergreen products in the multi-billion dollar pet industry

Common Mistakes to Avoid When Importing to Global

Mistake 1: Choosing EXW without a local agent. Many beginners choose EXW because the unit price is lower, but they soon realize they have no way to get the goods out of China or handle export customs.
Mistake 2: Failing to verify HS Codes. If you use the wrong code, you could be hit with massive fines or pay way more duty than necessary.
Mistake 3: Not getting a Quality Control (QC) inspection. Paying for a shipment before it is inspected is the fastest way to lose money on defective products.
Mistake 4: Ignoring Cargo Insurance. For a very small fee, you can protect your entire investment against shipwrecks, fires, or theft during the long transit across the ocean.
Mistake 5: Underestimating Lead Times. Always account for Chinese holidays like Lunar New Year and potential port congestion which can delay your stock for weeks.

Why Import Mastery Is Your Best Shortcut

Navigating the nuances of understanding EXW vs FOB shipping terms for beginners is just the tip of the iceberg. To truly succeed, you need a proven roadmap that covers everything from sourcing to scaling. This is where the Import Mastery course from HowToImportFromChina.com becomes your most valuable asset.

Our platform has helped thousands of importers avoid the 'rookie mistakes' that drain bank accounts. By following our step-by-step framework, you gain the confidence to negotiate like a pro and the technical knowledge to ensure your goods arrive safely and legally every single time.

Ready to transform your business and master the art of global sourcing? Learn from the world's best experts today.

Join the Import Mastery Masterclass

Browse Country Guides

Understanding EXW vs FOB Shipping Terms for Beginners