EXW vs DPD (importing from China)

[Luke KSC]

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

 

[MOIC]

What's the total value of the goods including shipping charges?

What's the weight and dimensions of each carton?

 

[Larry Fong]

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.

 

[Luke KSC]

What's the total value of the goods including shipping charges?

What's the weight and dimensions of each carton?

What's the total value of the goods including shipping charges?

What's the weight and dimensions of each carton?

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

 

[Luke KSC]

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.

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?

 

[Import Expert]

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.

 

[Luke KSC]

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.

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?

 

[CHUKTC]

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.

 

[Luke KSC]

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.

thanks

they have sent me a proforma invoice is this the same as a commercial invoice?

 

[MOIC]

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.

 

[CHUKTC]

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.

 

[Luke KSC]

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.

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?

 

[Luke KSC]

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.

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?

 

[Graham Wharton]

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.

 

[Luke KSC]

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.

Which thread are you alluding to?

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

thanks

 

[Graham Wharton]

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

 

[Luke KSC]

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

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!

 

[Kay0836]

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

Hello ,


Is this issue solved or not yet ?


Kay

 

[Luke KSC]

Hello ,


Is this issue solved or not yet ?


Kay

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!

 

[Luke KSC]

Hi everyone. Just providing an update for any of you who are interested.

We received the products around the estimated date they provided for delivery. The invoice attached to the delivery reflects the amount I paid for the stock. Overall, had a good experience importing from China. I would definitely use Delivery Duty Paid option again.

 

[Luke KSC]

Ps thanks for all of your help!

 

[MOIC]

Did you receive any documents showing the Import Duty & VAT that was paid?

 

[Luke KSC]

Did you receive any documents showing the Import Duty & VAT that was paid?

Hi sorry I missed this.

There was just an invoice attached to the box but it didn’t stipulate anything about Duty + VAT.

should I ask the my supplier for some evidence?

 

[MOIC]

You can ask, but I doubt they'll be able to offer you the correct documents required.

 

[Luke KSC]

You can ask, but I doubt they'll be able to offer you the correct documents required.

That was my first time importing. Would you recommend I choose EXW terms for when we next order?

 

[MOIC]

That was my first time importing. Would you recommend I choose EXW terms for when we next order?

It will depend on the volume and weight of the shipment as well as shipping mode (air or sea).

If it's a small shipment being sent by air, then EXW is fine as the shipping agent will prepare all the documents.

If it's a larger shipment to be sent by sea, then get an FOB quote, but discuss this with a UK forwarder to quote you a price from UK port delivered to your door.

 

[Luke KSC]

It will depend on the volume and weight of the shipment as well as shipping mode (air or sea).

If it's a small shipment being sent by air, then EXW is fine as the shipping agent will prepare all the documents.

If it's a larger shipment to be sent by sea, then get an FOB quote, but discuss this with a UK forwarder to quote you a price from UK port delivered to your door.

Thank you.

Your advice has been invaluable.

Our first order was a small(ish) sent by sea. If our first test order sells well and we find there is a niche market waiting to be filled with out product then we intend to place a larger order. We intend to grow steadily.

I have been on your website and I understand that you offer quality control. 15 of our products were unsuitable and don't have any resale value. When we are ready to place our next order I would like to speak to you about that if that is okay?

Thanks