Why the delivery term matters as much as the unit price
Buyers comparing quotations for yoga apparel wholesale orders often look at the unit price first. The delivery term written next to it is just as important. It defines which costs are included, who arranges each step of the journey and where the risk of loss or damage passes from seller to buyer. A unit price on one term cannot be compared with a unit price on another until those differences are understood.
Delivery terms are usually written using the Incoterms rules published by the International Chamber of Commerce. This note explains the concepts behind the two terms buyers ask about most, FOB and DDP, with a short look at others. It is general information, not legal or customs advice.
FOB: Free On Board
Under FOB, the seller delivers the goods cleared for export and loaded on board the vessel at a named port of shipment. Risk passes to the buyer once the goods are on board. From that point the buyer arranges and pays for the main sea freight, insurance if wanted, import customs clearance, duties and taxes, and delivery to the final address.
FOB is designed for sea and inland waterway transport. Garments usually travel in containers, and the goods are often handed to the carrier at a container terminal before they are loaded. For that reason FCA (Free Carrier) is often the more accurate term for containerized goods; in practice FOB remains widely used in apparel quotations, so it is worth knowing both.
DDP: Delivered Duty Paid
Under DDP, the seller bears the costs and risks of bringing the goods to the named destination, cleared for import, with duties and taxes paid. The buyer receives the goods at the agreed place and handles unloading. The seller, or someone acting for them, is usually the importer of record in the destination country.
DDP is convenient for small buyers who do not want to manage freight and customs. It also concentrates a lot of responsibility in the seller's hands, which brings its own questions, covered below.
Side by side
| Item | FOB (named port of shipment) | DDP (named destination) |
|---|---|---|
| Export clearance | Seller | Seller |
| Main freight | Buyer arranges and pays | Seller arranges and pays |
| Where risk passes | When goods are on board at the port of shipment | When goods are made available at the named destination |
| Insurance in transit | Buyer's decision | Seller's interest, since seller carries the risk |
| Import clearance | Buyer, usually through a customs broker | Seller, or an agent acting for the seller |
| Import duty and taxes | Buyer pays | Seller pays, built into the price |
| Importer of record | Usually the buyer | Usually the seller or its agent |
| Control over carrier and timing | Buyer | Seller |
Other terms you will see
- EXW (Ex Works): the seller makes goods available at its premises. The buyer handles everything else, including export clearance. Practical only if your forwarder can manage export formalities in the origin country.
- FCA (Free Carrier): the seller delivers export-cleared goods to the buyer's carrier at a named place. Often the better fit for containerized and air shipments.
- CIF (Cost, Insurance and Freight): the seller pays freight and minimum insurance to the destination port, but risk passes when goods are on board at origin, as with FOB.
Duty, classification and the customs broker
Import duty depends on the classification of each garment under the destination's tariff schedule, in the US the Harmonized Tariff Schedule (HTS). For apparel, classification usually turns on details such as whether the garment is knitted or woven, the fiber that predominates by weight and the garment type, so a nylon and spandex legging and a cotton blend top may be classified differently. Trade measures can also change over time.
We do not quote duty rates. Before you choose a term or finalize a price, confirm the HTS classification and the applicable duty for each style with a licensed customs broker, and give them the fabric sheet showing composition and knit or woven construction. That applies on DDP too: you still want to know what has been declared on your behalf.
Questions to ask about a DDP quote
- Who is the importer of record, and in whose name are the goods declared?
- How are the goods classified and valued on the entry, and can you see the entry documents?
- Which shipping method and route are included, and what is the expected transit?
- Are destination charges and final delivery included, and to which address type?
- What happens if the shipment is held for inspection or documentation?
Clear answers mean the term is being used properly. Vague answers mean you may carry risks you did not price in.
Responsibilities that do not move with the term
Whatever the delivery term, the brand on the label is responsible for what it sells. Fiber content, country of origin and RN labeling under 16 CFR 303, care labeling under 16 CFR 423, flammability rules under 16 CFR 1610, CPSIA for children's products and state rules such as Proposition 65 and PFAS restrictions still need to be handled. See the compliance overview and the US labeling rules note.
Documents that travel with the goods
Under any term, the shipment needs a commercial invoice, a packing list that matches the carton marks, and the transport document. Ask that the invoice describes each style clearly, with fiber content and knit or woven construction, because a vague description such as "garments" invites questions at the border. Your broker can tell you what else your destination requires.
Which term suits which buyer
Buyers with a forwarder and a customs broker usually prefer FOB or FCA: they control the carrier, can consolidate shipments from two clusters and see each cost line. Smaller buyers placing a first order sometimes prefer the simplicity of DDP, accepting less visibility. A middle path is FOB with a forwarder who also offers customs brokerage, so one party handles the journey from port to door.
The delivery term for your program is stated on the written quotation and order confirmation. Our shipping and carton note covers packing, and MOQ and lead time shows how production dates feed into shipping. To discuss terms for a specific order, send a brief.