EXW vs DDP: which Incoterm should you use?
EXW (Ex Works) versus DDP (Delivered Duty Paid) — who pays freight, where risk transfers, and what each choice does to your landed cost. Last reviewed 16 July 2026.
EXW and DDP are opposite extremes: EXW puts nearly every cost and risk on the buyer; DDP puts them all on the seller, right through to duty-paid delivery.
EXW vs DDP at a glance
| Factor | EXW — Ex Works | DDP — Delivered Duty Paid |
|---|---|---|
| Group | E — Departure | D — Arrival |
| Transport mode | Any mode | Any mode |
| Who pays main freight | Buyer | Seller |
| Insurance obligation | No obligation on either party | No obligation on either party (seller carries risk to destination) |
| Risk transfers | At the seller's premises, once goods are placed at the buyer's disposal (not loaded) | At the named place of destination, cleared for import and ready for unloading |
| Export clearance | Buyer | Seller |
| Import clearance | Buyer | Seller |
| Best for | Buyers with their own forwarder who want maximum control from the factory gate | Landed-price sales where the buyer wants zero customs work — seller pays duty and import VAT |
Based on the Incoterms 2020 rules (ICC). Always confirm the exact obligations in your sales contract — as of 16 July 2026.
When to choose EXW
Choose EXW when you want full control and the lowest supplier price, and you have the forwarding capability to run the whole journey — origin transport, export and import clearance, freight and duty. It is the maximum-responsibility option for the buyer and rewards importers with strong logistics operations.
When to choose DDP
Choose DDP when you want a true landed price with zero customs work: the seller delivers to your door with duty and import VAT paid. It is attractive for simplicity, but the seller has to be able to act as importer of record in your country, and any duty and VAT they pay is priced back into your cost — usually with a margin you cannot see.
What it does to your landed cost
This pairing brackets the entire cost spectrum. EXW exposes every line — freight, insurance, duty, import VAT, clearance — for you to control and optimise. DDP hides them inside one number, and because the seller fronts duty and VAT, those charges are marked up and you lose the ability to reclaim import VAT cleanly. For VAT-registered importers especially, a delivered term where you are importer of record (like DAP) often lands cheaper. Run both through the calculator to see the true per-unit gap.
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