DDP vs DAP: When Your Supplier Handles Delivery to Your Door

Letting the Supplier Handle Logistics

Most importers use FOB or CIF — terms where you handle at least part of the shipping process. But two Incoterms shift most of the logistics burden to the supplier: DAP and DDP.

These are becoming more popular, especially for smaller orders and e-commerce sellers who want simplicity.

DAP: Delivered at Place

The supplier delivers the goods to your specified location (warehouse, FBA centre, etc.), but you handle import customs clearance and pay duties/taxes.

Supplier handles: All transport from factory to your door You handle: Import customs clearance, duty payment, VAT/GST payment

When to use DAP:

• You want door-to-door delivery without customs hassle knowledge
• You're importing into a country where you have an established customs broker
• You want the supplier to manage shipping but prefer to control customs declarations yourself

DDP: Delivered Duty Paid

The supplier handles everything — transport, customs clearance, duty, and taxes. The goods arrive at your door with nothing left to pay.

Supplier handles: All transport, customs clearance, duties, taxes You handle: Nothing — just receive the goods

When to use DDP:

• You want maximum simplicity
• You're placing small or infrequent orders
• Your supplier has established import capabilities in your country
• You're new to importing and the customs process feels overwhelming

Comparison Table

The Hidden Costs of DDP

DDP sounds perfect — the supplier handles everything and quotes you one all-in price. But here's what you might not see:

Markup on Freight

The supplier adds their margin on shipping — often 15–30% above what you'd pay directly.

Markup on Duties

Suppliers may estimate duty conservatively (higher than actual) to protect their margin.

VAT Complications

If the supplier pays your import VAT under DDP, reclaiming it can be complicated. The import documentation may be in the supplier's name, making it harder for you to reclaim.

Less Control

You can't choose the shipping line, route, or customs broker. If the supplier uses a slow carrier or an unreliable broker, your shipment may be delayed.

When DDP and DAP Are Worth the Premium

Small Orders

When your shipment is small (a few hundred units), the convenience premium of DDP/DAP is worth it. The absolute cost difference is small, and the time you save is significant.

Testing New Products

For a test order of a new product, DDP eliminates one more variable. Focus on whether the product sells rather than optimising logistics.

First-Time Imports

If you've never imported before, DDP lets you learn the product side of the business before tackling logistics and customs.

When to Switch to FOB

As your business grows, switch to FOB (or EXW) for more control and lower costs:

• You're importing regularly (monthly or more)
• Your shipments are large enough to negotiate competitive freight rates
• You have a reliable freight forwarder and customs broker
• Cost optimisation matters more than convenience

Use LandedCost.io to compare your total costs under different Incoterms and find the most profitable approach for your volume.