Glossary · Business & Sourcing
What Is Incoterms?
Incoterms are the international commercial terms published by the International Chamber of Commerce that define who arranges and pays for each step of a shipment — export clearance, main carriage, insurance, import clearance and delivery — and where risk transfers from seller to buyer. Each term is a three-letter code such as FOB, EXW or DDP.
Why it matters when you source
Many price disputes between a brand and its factory are really Incoterms disputes. Agree the three-letter term in writing on the quotation, because EXW and DDP are very different prices for the same product.
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