When placing wholesale apparel orders overseas, one of the most important clauses in your contract is the Incoterm (International Commercial Term). The term you choose determines who pays for freight, who assumes shipping risk, and who handles U.S. Customs clearance.

The two most common terms used in B2B garment trading are FOB (Free On Board) and DDP (Delivered Duty Paid). Understanding the difference can save your company thousands of dollars and endless administrative friction.

1. FOB (Free On Board): High Control, High Responsibility

Under FOB terms, the overseas factory is responsible for producing the goods and loading them onto the vessel at the port of origin (e.g., Shanghai, Shenzhen, or Ho Chi Minh City). Once loaded, the buyer assumes all responsibility.

• Pros: Gives large buyers direct control over ocean freight quotes, routing, and choice of U.S. customs brokers.

• Cons: The buyer must manage freight forwarding, ocean insurance, ISF filings, U.S. Customs entry, tariff classification (HS Codes), harbor maintenance fees, and inland trucking to the final warehouse.

2. DDP (Delivered Duty Paid): Turnkey Convenience & Risk Relief

Under DDP terms, the seller/importer handles the entire logistics chain from factory floor directly to your U.S. warehouse door.

• Pros: Completely hands-off for the buyer. The seller pays for international shipping, insurance, import duties, and local delivery. You pay a predictable, all-inclusive price per unit without unexpected port fees or customs delays.

• Cons: Freight margins may be built into the per-unit price by the seller.

Which Option Is Right for Your Brand?

• Choose FOB if: You have an in-house logistics team, an established relationship with a freight forwarder, and high shipment volumes to justify managing customs entries independently.

• Choose DDP if: You want predictable landed costs, minimal administrative hassle, and absolute protection against unexpected customs fines, demurrage, or transport delays.

Simplify Your Imports with Comptoir Solutions Corp

As a registered U.S. corporation based in North America, Comptoir Solutions Corp bridges this gap. We offer both flexible FOB pricing for experienced logistics teams and hassle-free DDP solutions for growing brands looking for a turnkey import partner.