EXW vs FOB vs CIF vs DDP for Flower Vending Machine Buyers

15 juillet 2026

When you request a quote from a flower vending machine manufacturer in China, the price they give you is almost meaningless without knowing the incoterm it's based on. A machine quoted at $4,000 EXW and $4,800 CIF may cost you exactly the same once you add freight — or the CIF quote could be hiding a $600 markup.

This guide explains the four incoterms you'll encounter most often, what each one means for your costs and risk, and which term experienced buyers prefer.

What Are Incoterms?

Incoterms (International Commercial Terms) are a set of standardized trade terms published by the International Chamber of Commerce (ICC). They define:

Who arranges and pays for each leg of transport
Where risk transfers from seller to buyer
Who is responsible for export and import customs clearance

The current version is Incoterms® 2020. Always specify the version and named place when agreeing a price (e.g., "FOB Shenzhen, Incoterms® 2020").

The Four Incoterms at a Glance

Incoterm	Risk Transfers At	Seller Arranges	Buyer Arranges	Buyer Cost Control
EXW	Factory gate	Nothing	Everything	Maximum
FOB	On board vessel at origin port	Export customs + loading	Ocean freight + insurance + import	High
CIF	On board vessel at origin port	Export customs + ocean freight + insurance	Import duty + inland delivery	Medium
DDP	Your named destination	Everything including import duty	Nothing (unloading only)	Minimum

EXW — Ex Works

What It Means

The seller's only obligation is to make the goods available at their factory (or named place). The buyer takes responsibility for everything from that point: loading at the factory, inland trucking to the port, export customs declaration, ocean freight, marine insurance, import customs, duty, and final delivery.

Risk Transfer

Risk passes to the buyer the moment the goods are made available at the factory — even before they're loaded onto the truck.

Cost Impact

EXW gives you the lowest quoted price from the supplier, but you bear all logistics costs. For buyers without an established freight forwarder in China, EXW can be operationally complex because you need a Chinese entity or agent to handle export customs on your behalf.

When to Use EXW

You have a trusted freight forwarder with a China presence
You want maximum transparency over every cost component
You're ordering multiple machines and want to negotiate freight rates directly

Watch Out For

Under EXW, the buyer is technically responsible for export customs clearance — which requires a Chinese business license or a licensed customs agent in China. Many first-time importers don't realize this and face delays at the origin port.

FOB — Free on Board

What It Means

The seller delivers the goods on board the vessel at the named origin port (e.g., "FOB Shenzhen"). The seller handles export customs clearance and loading. Once the goods are on the ship, risk and cost transfer to the buyer.

Risk Transfer

Risk passes when the goods are loaded on board the vessel at the origin port.

Cost Impact

FOB is the most widely used incoterm for manufactured goods from China. You get a clean price that includes the machine, export packaging, inland trucking to the port, and export customs — and you control ocean freight, insurance, and import costs directly.

FOB Cost Example (Combo Machine, FOB Shenzhen)

Component	Who Pays	Typical Cost
Machine + export packaging	Included in FOB price	—
Inland trucking to Shenzhen port	Included in FOB price	—
Export customs declaration	Included in FOB price	—
Ocean freight (LCL, China → Sydney)	Buyer	$520
Marine insurance	Buyer	$20
Import duty (Australia, 0%)	Buyer	$0
Customs clearance fee	Buyer	$220
Inland delivery (Sydney)	Buyer	$280

When to Use FOB

You have a freight forwarder at your destination country
You want to control freight costs and carrier selection
You're an experienced importer comfortable with customs processes
This is the recommended term for most flower vending machine buyers

CIF — Cost, Insurance and Freight

What It Means

The seller pays for ocean freight and minimum insurance to the named destination port (e.g., "CIF Sydney"). However — and this is the critical point — risk still transfers to the buyer when the goods are loaded on the vessel at the origin port, not when they arrive at the destination.

Risk Transfer

Risk passes at the origin port (same as FOB), even though the seller pays for freight and insurance to the destination. This means if the cargo is damaged at sea, the buyer must claim against the seller's insurance policy — which may provide only minimum coverage.

Cost Impact

CIF quotes appear higher than FOB because they include freight and insurance. However, suppliers often mark up freight costs by 10–20% in a CIF quote. You lose visibility into the actual freight rate and have no control over carrier selection or insurance coverage level.

The Hidden Markup Problem

Scenario	FOB Price	Actual Freight	CIF Quote	Supplier Markup
Combo machine to Los Angeles	$4,800	$580	$5,600	$220 (38% markup on freight)
Large capacity to London	$6,500	$480	$7,300	$320 (67% markup on freight)

When CIF Makes Sense

You're a first-time importer and want the supplier to handle freight logistics
You're ordering a single machine and don't want to manage a freight forwarder relationship
The destination port is in a country where the supplier has established freight partnerships

If You Use CIF

Always ask the supplier to disclose the actual freight rate and insurance premium separately. This lets you verify whether the CIF price is fair or inflated.

DDP — Delivered Duty Paid

What It Means

The seller delivers the goods to the named destination, cleared for import, with all duties and taxes paid. The buyer's only obligation is to unload the goods at the delivery point.

Risk Transfer

Risk passes at the named destination when the goods are made available for unloading.

Cost Impact

DDP is the most expensive quoted price because it includes everything. Suppliers typically add a significant margin to cover their risk on import duties, currency fluctuations, and customs delays. For markets with high import duties (e.g., the US with Section 301 tariffs), DDP quotes can be 30–40% above the FOB price.

The VAT/GST Problem with DDP

In many countries (UK, EU, Australia), import VAT or GST is recoverable by VAT-registered businesses. Under DDP, the supplier pays this tax — and may not be able to recover it, so they pass the full cost to you. If you import under FOB and pay VAT yourself, you can reclaim it. Under DDP, you effectively pay VAT twice (once embedded in the DDP price, once when you can't reclaim it).

When DDP Makes Sense

You have no import experience and want a completely hands-off purchase
You're in a market with low or zero import duties
You're not VAT/GST registered and cannot reclaim import taxes
The order is a one-off and logistics complexity isn't worth your time

Side-by-Side Comparison: Same Machine, Four Incoterms

Combo flower vending machine shipped from Shenzhen to Melbourne, Australia:

Cost Component	EXW	FOB	CIF	DDP
Machine (ex-factory)	$4,800	$4,800	$4,800	$4,800
Export packaging + loading	$150 (buyer)	Included	Included	Included
Inland trucking to port	$120 (buyer)	Included	Included	Included
Export customs	$80 (buyer)	Included	Included	Included
Ocean freight	$520 (buyer)	$520 (buyer)	Included*	Included
Marine insurance	$20 (buyer)	$20 (buyer)	Included (min.)	Included
Import duty (0%)	$0 (buyer)	$0 (buyer)	$0 (buyer)	Included
GST 10%	$549 (buyer)	$549 (buyer)	$549 (buyer)	Included**
Customs clearance	$220 (buyer)	$220 (buyer)	$220 (buyer)	Included
Inland delivery	$280 (buyer)	$280 (buyer)	$280 (buyer)	Included
Supplier logistics margin	—	—	~$150	~$400
Total buyer outlay	~$6,739	~$6,389	~$6,549	~$7,200+

*CIF freight included in supplier quote but may carry a markup. **GST under DDP may not be recoverable by the buyer.

FOB delivers the best combination of cost control and simplicity for most buyers.

Buyer Recommendation by Experience Level

Buyer Profile	Recommended Incoterm	Reason
First-time importer, single machine	CIF or DDP	Simplicity outweighs cost premium
Experienced importer, 1–4 machines	FOB	Best cost control, manageable logistics
Scaling buyer, 5+ machines	FOB or EXW	Maximum savings at volume; own freight forwarder justified
VAT-registered business (UK/EU/AU)	FOB	Reclaim import VAT/GST directly
Non-VAT-registered, low-duty market	DDP	Avoid customs complexity