EXW vs DPD (importing from China)

Discussion in 'International Business' started by Luke KSC, Apr 17, 2021.

  1. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    Hi all,

    It is my first time importing from China so I am just looking for some help with what to do next.

    I have negotiated a price for the product that we want from a company on Alibaba. I have done my due dilligence and based on the research I have done, they seem like a respectable company. I have placed a test order of 200 pieces and if the consistencty and the quality of the product is at an acceptable standard I would place a larger order in future.

    They gave me 2 options on shipping: EXW or DDP.

    I understand that EXW means I sort everything out.

    The total weight of the shipment is 192kgs and they have quoted DDP at USD545.60.

    I have read some issues regarding DDP and some with EXW.

    What companies should I get to get a quote for EXW? or should I just use the DDP option that they are offering?
    I don't mind paying a little more for the convenience of receiving the products directly to my door.

    Thanks
    Luke
     
    Posted: Apr 17, 2021 By: Luke KSC Member since: Apr 17, 2021
    #1
  2. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Legend Free Member

    5,658 1,343
    What's the total value of the goods including shipping charges?

    What's the weight and dimensions of each carton?
     
    Posted: Apr 17, 2021 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #2
  3. Larry Fong

    Larry Fong UKBF Contributor Full Member

    85 8
    If the order quantity is small, DDP would not be an big issue. If you order a large quantity, then you can make some saving in cost and potentially more flexibility such as arrange quality inspection and logistics.
     
    Posted: Apr 17, 2021 By: Larry Fong Member since: Dec 16, 2020
    #3
  4. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    one box size is260x240x40mm, one piece weight is 890g, and 17pcs in one carton, carton size is 59x29x32cm, one carton weight is 16kgs.
    so 200pcs total 12pcs carton, weight is 192kgs.

    Goods and shipping comes to USD2120
     
    Posted: Apr 18, 2021 By: Luke KSC Member since: Apr 17, 2021
    #4
  5. Luke KSC

    Luke KSC UKBF Newcomer Free Member

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    okay thanks. I just read that sometimes when ordering DDP in China there could be issues with customs if the freight forwarders undervalue or don’t pay correct duty etc. Have you had experience using DDP?
     
    Posted: Apr 18, 2021 By: Luke KSC Member since: Apr 17, 2021
    #5
  6. Import Expert

    Import Expert UKBF Regular Free Member

    350 139
    DDP technically means that the only thing you would pay for is import VAT (If you are VAT registered you can use postponed VAT accounting). Yes please ensure they declare full value or HMRC will come after you.
     
    Posted: Apr 19, 2021 By: Import Expert Member since: Feb 1, 2012
    #6
  7. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    Thanks

    We are start-up so not VAT registered just yet. The DDP terms they have given state on the contract they are responsible for import duty and VAT. I am going to go with that I think.

    On the contract, it states: Seller should ship out Products at the designated Port/Place of Loading within 90 calendar day(s) after receiving Total Amount. - This confuses me because:

    They said lead time would be 20-30 days and shipping would be 50-60 days so should this be stipulated in the contract?
     
    Posted: Apr 19, 2021 By: Luke KSC Member since: Apr 17, 2021
    #7
  8. CHUKTC

    CHUKTC UKBF Regular Free Member

    200 34
    If they are really offering DDP and VAT paid then it does simply things for you. Particularly as you are not registered for VAT and therefore can't claim this back. As mentioned above it is really important that the CI accompanying the shipment is a fair reflection of the price - otherwise HMRC may decide to impose their own (higher) valuation leaving you liable to paying the deficit. Get them to confirm the value they are putting on the CI and to send you a copy when shipped.
    Re the contract - definitely query the timetable. If lead time is 20-30 days then delivery to port of loading should be a similar timeframe ask them to confirm in writing before parting with any money.
     
    Posted: Apr 19, 2021 By: CHUKTC Member since: Jan 2, 2019
    #8
  9. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    thanks

    they have sent me a proforma invoice is this the same as a commercial invoice?
     
    Posted: Apr 19, 2021 By: Luke KSC Member since: Apr 17, 2021
    #9
  10. MY OFFICE IN CHINA

    MY OFFICE IN CHINA UKBF Legend Free Member

    5,658 1,343
    The Commercial Invoice should include the Incoterms DDP. (If that's what you're going for)

    Given your above information, I suggest going with DDP with your supplier, rather than EXW.
     
    Posted: Apr 20, 2021 By: MY OFFICE IN CHINA Member since: Nov 16, 2011
    #10
  11. CHUKTC

    CHUKTC UKBF Regular Free Member

    200 34
    As above the commercial invoice will be slightly different with more information on. The important thing is to get confirmation from them that the same value will be put on the CI as on your proforma. Then you should not run into problems with undervalued goods on arrival.
     
    Posted: Apr 20, 2021 By: CHUKTC Member since: Jan 2, 2019
    #11
  12. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    Yes on the trade assurance contract via Alibaba.com it states DDP. It also states this on the proforma invoice they sent. I am paying through Alibaba.com trade assurance so I assume they would want to ensure that I get the delivery so they can receive their money from the beneficiary bank?

    do I need shipping insurance or are they the ones who are responsible?
     
    Posted: Apr 20, 2021 By: Luke KSC Member since: Apr 17, 2021
    #12
  13. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    yes I understand. Even if I have a commercial invoice that states the amount, there’s nothing arguably stopping them undervaluing goods via their invoice is there? But if I have a different one could that help against any issues with HMRC or Alibaba.com?
     
    Posted: Apr 20, 2021 By: Luke KSC Member since: Apr 17, 2021
    #13
  14. Graham Wharton

    Graham Wharton UKBF Newcomer Free Member

    16 2
    As someone in another thread will agree, make sure the products come with all safety certs if applicable so they are not seized by trading standards on import.
     
    Posted: Apr 20, 2021 By: Graham Wharton Member since: Apr 20, 2021
    #14
  15. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    Which thread are you alluding to?

    They are steel kebab skewers? What certificates would these require?

    thanks
     
    Posted: Apr 21, 2021 By: Luke KSC Member since: Apr 17, 2021
    #15
  16. Graham Wharton

    Graham Wharton UKBF Newcomer Free Member

    16 2
    I can't post links in this forum, but if you look for the recent thread called "
    please help shipment seized by trading standards "

    It's more for electrical, flammable, toys etc. May be worth checking in with trading standards who can advise if any applicable safety standards are required. Can't think of any for kebab skewers, but don't take my word for it.

    Cheers
     
    Posted: Apr 21, 2021 By: Graham Wharton Member since: Apr 20, 2021
    #16
  17. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    Thanks I’ll have a look at that now.

    I have checked the Gov website and I can’t seem to find anything pertaining to skewers. Hopefully, as it’s DPD I get what I’ve asked for. The company also have experience selling to the UK market so hopefully that counts for something!
     
    Posted: Apr 22, 2021 By: Luke KSC Member since: Apr 17, 2021
    #17
  18. Kay0836

    Kay0836 UKBF Newcomer Free Member

    2 0
    Hello ,


    Is this issue solved or not yet ?


    Kay
     
    Posted: May 1, 2021 By: Kay0836 Member since: Jul 1, 2017
    #18
  19. Luke KSC

    Luke KSC UKBF Newcomer Free Member

    10 0
    I decided to go with DPD delivery. I expect the product around July so if I receive the product without any issues then you could maybe say it has been resolved then!
     
    Posted: May 3, 2021 By: Luke KSC Member since: Apr 17, 2021
    #19